Economists do not think price discrimination is unfair because
A. people with higher incomes should pay higher prices than those with lower incomes.
B. if the prices charged to some buyers get too high, those who are able to buy at lower prices will just resell their purchases to the people facing the high prices.
C. economists are concerned with efficiency rather than fairness.
D. more buyers are able to purchase the good with price discrimination, some buyers pay a lower price than if there were a single price, and sellers earn higher profit than if there were a single price.
Answer: D
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The table above shows the situation in the gasoline market in Tulsa, Oklahoma. If the price of a gallon of gasoline is $3.65, then
A) there is a surplus of gasoline in Tulsa. B) there is a shortage of gasoline in Tulsa. C) the gasoline market in Tulsa is in equilibrium. D) Without more information we cannot determine if there is a surplus, a shortage, or an equilibrium in the gasoline market in Tulsa. E) There is neither a surplus nor a shortage, but the market is NOT in equilibrium.
Which of the following represents a price elastic supply?
A) The quantity demanded increases 18 percent as a result of a decrease in the price of 8 percent. B) The price rises by 8 percent causing the quantity demanded to fall by 10 percent. C) The quantity supplied increases by 21 percent as a result of an increase in the price of 12 percent. D) The price rises by 22 percent causing the quantity supplied to increase by 3 percent.
Suppose the real wage remains unchanged between Year 1 and Year 2 but the nominal wage increases from $20 to $24 . Based on this information, we can conclude that the price level has: a. increased by 20 percent. b. increased by 25 percent. c. remained unchanged
d. decreased by 10 percent. e. decreased by 20 percent.
Assume the economy is operating at a real GDP above full-employment real GDP. Keynesian economists would prescribe which of the following policies?
A. nonintervention B. fixed rule C. contractionary D. expansionary