Why is a discounted airline fare a price discrimination that can be offered?
(A) Because people who fly on business want the price discounts but do not qualify.
(B) Because senior citizens qualify for discounts on certain types of flights but not on others.
(C) Because people do not necessarily want to go where the discounts will allow them to go.
(D) Because vacationers are willing to put up with the restrictions that the airlines impose.
Answer: (D) Because vacationers are willing to put up with the restrictions that the airlines impose.
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"Because chips and salsa are complements, an increase in the price of chips will cause the demand for salsa to decrease
This initial shift in demand for chips results in a higher price for chips; this higher price will cause the demand curve for chips to shift to the right." Which of the following correctly comments on this statement? A) The statement is false because one cannot assume that chips and salsa are complements for all consumers. B) The statement is false because a change in the price of chips would not change the demand for chips. C) The statement will be true if consumer tastes for chips and salsa do not change. D) The statement is false because salsa is an inferior good; chips are normal goods.
The figure above illustrates the effect of an increased rate of money supply growth at time period T0. From the figure, one can conclude that the
A) liquidity effect is smaller than the expected inflation effect and interest rates adjust quickly to changes in expected inflation. B) liquidity effect is larger than the expected inflation effect and interest rates adjust quickly to changes in expected inflation. C) liquidity effect is larger than the expected inflation effect and interest rates adjust slowly to changes in expected inflation. D) liquidity effect is smaller than the expected inflation effect and interest rates adjust slowly to changes in expected inflation.
To counter the negative effects of the Great Recession, the U.S.
A. induced implosions in deficits through fiscal policies. B. increased the long-term interest rate to 8 percent. C. induced explosions in deficits through fiscal policies. D. reduced the inflation rate to zero.
?Kites /hourSnowboards /hourJesse81April123
Consider two individuals, Jesse and April, who hand paint kites and snowboards. Table 3.2 shows how much of each good Jesse and April can paint in one hour. Which of the following is true?
A. April has a comparative advantage in painting kites but not snowboards. B. April has a comparative advantage in painting snowboards but not kites. C. April has a comparative advantage in painting both goods. D. April does not have a comparative advantage in painting either good.