In two-part pricing with identical consumers, a firm
A) charges a lump-sum fee equal to the consumer surplus.
B) sets unit price below marginal cost.
C) should go with single-price monopoly pricing to maximize profits.
D) Both A and B.
A
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An individual is endowed with $100 of income in period 1, and will receive an income of 121 in period 2. The interest rate is 10%, and there are only 2 periods. The maximum second period consumption is
a) 100 b) 121 c) 221 d) 231 e) 233.1
An expansionary fiscal policy is likely to result in
A) higher interest rates and lower private investment. B) lower interest rates and higher private investment. C) higher interest rates and higher private investment. D) lower interest rates and lower private investment.
A decrease in income will lead to an increase in the demand for an inferior good.
Answer the following statement true (T) or false (F)
One factor that contributed to the gradual decline in United States farm income during the 20th century was
a. World War I b. World War II c. unemployment among farmers d. the low price and income elasticities of demand for farm goods e. slow technological change in agriculture