Michael values a stainless steel refrigerator for his new house at $3,500, but he succeeds in buying one for $3,000 . Michael's willingness to pay is
a. $500.
b. $3,000.
c. $3,500.
d. $6,500.
c
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When does the free-rider problem arise?
A) when someone who benefits from a good does not have to contribute to paying for it B) when a firm does not have to advertise, because its customers recommend the product to their friends C) when policymakers ignore opportunity costs in making decisions D) when production of a good generates pollution
The conditions in which vertical relationships can enhance a firm's ability to price discriminate include
a. the manufacturer's product is of value to just one type of customer b. the costs of arbitraging the price differences across markets is small c. the manufacturer acquires the distributer in the higher priced market d. competition provide little ability for the manufacturer has to price above marginal cost
The income generated by _____ will be included in the GDP of an economy
a. a professional working in small start-up firm outside the territory of the economy b. a person selling marijuana to college students c. a person selling electronic guides to tourists d. a farmer selling oranges to a fruit juice manufacturer
If a monopolist's marginal costs increase by $1 for all levels of output, then the monopoly price will
a. rise by $1. b. rise by more than $1. c. rise by less than $1. d. not change, but profits will decrease.