With perfect price discrimination the monopoly
a. eliminates all price discrimination by charging each customer the same price.
b. charges each customer an amount equal to the monopolist's marginal cost of production.
c. eliminates deadweight loss.
d. eliminates profits and increases consumer surplus.
c
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According to this Application, falling home equity values have decreased consumer wealth, which is a measure of a consumer's
A) total net worth. B) annual income. C) annual income minus total expenses. D) annual income minus annual expenses.
All of the following are true of a perfectly competitive firm in long-run equilibrium except one. Which is the exception?
a. Its economic profit will be zero. b. Its accounting profit may be positive. c. It will be minimizing average total cost. d. It will be charging a price equal to marginal cost. e. Marginal cost is minimized.
Which of the following has proved to be spectacularly false, at least recently?
A. As an expansion proceeds, people will hold no more cash. B. As an expansion proceeds, banks will hold no more excess reserves. C. The oversimplified money multiplier formula is predicated on two critical assumptions. D. All of the above are false.
Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower