How does a company arrange to sell its products to people who are unwilling to pay the top price for them?
a) by allowing rebates to some preferred customers who buy a lot of goods
b) by charging each customer the maximum amount they are willing to pay
c) by charging different prices according to the group to which the buyer belongs
d) by changing the product and selling a lesser one to people who are unwilling to pay for the top product
Answer: c) by charging different prices according to the group to which the buyer belongs
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Explain how the decision by parents to not immunize their children, hoping that their children will not get sick because other parents have had their children immunized, is an example of free riding
How is this behavior dangerous to the public and therefore not socially optimal?
According to Keynes' philosophy of government budgets, _____
a. chronic deficits accumulate into a national debt b. permanent surpluses are desirable c. fiscal policy focuses on maintaining an annually balanced budget d. deficits dampen aggregate demand in the short run and reduce the federal debt e. deficits are appropriate during recessions
Which of the following would occur if the federal government decided to use a budget surplus to reduce the existing debt?
A. Crowding out and public sector output would decrease. B. Crowding out and public sector output would increase. C. Crowding in and private sector output would increase. D. Crowding in and private sector output would decrease.
A consumer can be said to have achieved equilibrium with respect to consumption when:
a. the marginal utility of each product consumed is the same. b. the last dollar spent on each product yields the same marginal utility. c. the total utility of each product consumed is at a maximum. d. the marginal utility of each product consumed is at a maximum.