Suppose that a price discriminating monopolist is able to divide its market into two groups. If the firm sells its product for $25 to the group whose customers have the least elastic demand, what price are they likely to charge to the group whose customers have the most elastic demand?
A. $25
B. more than $25
C. less than $25
D. The answer depends on the marginal revenue for that group.
Answer: C
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An increase in aggregate demand is shown by a
A) rightward shift of the AD curve. B) movement upward along the AD curve. C) movement downward along the AD curve. D) leftward shift of the AD curve.
Although the Fed professed employment of a monetary aggregate targeting strategy during the 1970s, its behavior suggests that it emphasized
A) free-reserve targeting. B) interest-rate targeting. C) a real-bills doctrine. D) price-index targeting.
Moving downward on a downward sloping linear demand curve, the absolute value of the price elasticity of demand
A) is constant. B) increases continuously. C) decreases continuously. D) may either increase or decrease.
Compensation wage differentials are
A. used to make pay equal across different groups of workers. B. driven primarily by differences in ability. C. driven primarily by differences in experience. D. used to offset the increased danger of some jobs.