A typical university football program requires alumni to join one of several booster clubs (each club gets seats in different parts of the stadium) before the person can buy season tickets. What has this got to do with consumer surplus?
What will be an ideal response?
This pricing plan is a good example of two-part pricing. The football program can increase its profits by using the two-part tariff to convert some consumer surplus into profits or producer surplus. In addition to the per-unit price, the second price is the cost of joining one of the booster clubs.
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You have an hour between your economics and math classes. What is the opportunity cost of that time if you use it to complete your math homework instead of your economics homework?
A) the economics homework you could have completed B) the cost of your calculator and math textbook C) the math homework you chose to complete D) zero, because it doesn't cost any money to do your math homework
What is the difference between the two types of sealed-bid auctions?
What will be an ideal response?
According to the law of diminishing returns, if population grows, but the amount of available resources stays the same, output will ______.
a. fall at an inverse rate b. stay the same c. rise, but by ever shrinking amounts d. rise at a steady rate
Refer to Figure 10.1. Suppose the individual is initially at point b. Based on the figure, the individual is currently:
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A. a saver, which is his optimal choice.
B. a borrower, which is his optimal choice.
C. a saver, though borrowing would increase his utility.
D. a borrower, though saving would increase his utility.