Joe, a hair dresser, offers students a discount price on haircuts. This form of pricing is an example of
A) a marginal cost pricing rule.
B) an average cost pricing rule.
C) price discrimination.
D) perfect price discrimination.
C
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A public good
A. costs essentially nothing to produce and is thus provided by the government at a zero price. B. generally results in substantial negative externalities. C. can never be provided by a nongovernmental organization. D. cannot be provided to one person without making it available to others as well.
When the economy is producing its potential output, an increase in government spending must necessarily reduce some component of private spending. This phenomenon is called
A) the multiplier effect. B) entitlement spending. C) fiscal policy. D) crowding out.
An example of income earned but not received is
A) welfare payments. B) Social Security payments. C) undistributed profits. D) a and b E) a, b, and c
You borrow $20,000 at an interest rate of 6% to open Candy Dan's, a gourmet sweet shop. You will earn an economic profit if the return on your investment is
A. between 0 and 6%. B. 6%. C. greater than 6%. D. only greater than 10%.