In order to accurately capture the multiplier effect, it is important to know:
A. what people's expectations of the future are.
B. real GDP.
C. what proportion of their additional income people spend.
D. individual's wealth.
Answer: C
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When a firm practices price discrimination, for each separate set of consumers it will determine the rate of output at which
A) MR > MC. B) MR = P. C) MR = AVC. D) MR = MC.
It is likely that, if we could measure the quality as well as the quantity of education,
a. the human-capital argument would become less compelling as a means of explaining wage differentials between white workers and black workers. b. the human-capital argument would become less compelling as a means of explaining wage differentials between male workers and female workers. c. wage differentials between white workers and black workers would be more puzzling than they are now. d. wage differentials between white workers and black workers would be more fully explained.
The drug maker Wyeth produces the hormone-therapy drug Premarin, which is derived from the urine of pregnant mares. Not even Wyeth knows exactly what chemicals are in it, and the method of making the drug is a trade secret. Barr Laboratories has been trying to make a pill that is close enough to Premarin to be approved by the U.S. Food and Drug Administration as an "equivalent" drug. This story illustrates the importance of:
A. declining long-run cost curves as a way of preserving monopoly. B. economies of scope in cementing a monopoly position. C. barriers to entry in keeping a monopoly position. D. declining demand curves as an essential ingredient in keeping monopoly.
An economy has two workers, Jen and Rich. Everyday they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. What is the opportunity cost for Jen to produce one radio?
A. 1/5 TV B. 10 TVs C. 5 TVs D. 1/10 TV