Two countries, A and B, produce Good X. Which of the following statements is true of the trading price of Good X?
A) The trading price of Good X is less than the opportunity cost of producing the good in both nations.
B) The trading price of Good X is greater than the opportunity cost of producing the good in both nations.
C) The trading price of Good X lies between the opportunity costs of producing the good in both nations.
D) The trading price of Good X is always equal to the opportunity cost of producing the good in Country A.
C
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Refer to Figure 5-4. Why is there a deadweight loss?
A) because the marginal social cost of producing each additional unit in excess of Q2 exceeds the marginal benefit B) because the marginal social benefit of producing each additional unit in excess of Q2 exceeds the private cost C) because the marginal private cost of producing each additional unit in excess of Q2 exceeds the marginal benefit D) because the marginal private benefit of producing each additional unit in excess of Q2 exceeds the social cost
One requirement for a firm pursuing a price-discrimination strategy is the ability to segment the market for its product. This means that
A) the firm must choose a marketing strategy that appeals to different segments of the economy. B) the firm must be able to divide the market in a way that makes arbitrage impossible. C) the firm must be willing to offer price discounts for senior citizens and children. D) the firm must set different prices for different regions where the product is sold.
If only current income is considered, beer taxes are _____. If lifetime income is considered, however, beer taxes are _____
a. regressive; progressive b. regressive; proportional c. progressive; regressive d. proportional; progressive
One of the challenges for development economists working in health care is to figure out a way to:
A. force doctors to practice good medicine. B. give incentives to families to make better health care choices. C. decrease the frequency of preventative medicine, such as immunizing children. D. All of these statements are true.