Given the typical price elasticity of demand for food, a poor harvest should, ceteris paribus, lead to
A. Lower prices and lower total revenues.
B. Higher prices and higher total revenues.
C. Higher prices but lower total revenues.
D. Lower prices but higher total revenues.
Answer: B
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Which of the following statements about price discrimination is false?
A) Price discrimination is a method for a seller to capture some consumer surplus. B) Compared to a single-price monopoly, the number of units sold increases when a monopoly price discriminates. C) Charging less for a second pizza that is identical to the first is an example of price discrimination. D) Price discrimination increases a monopoly's profit. E) All forms of price discrimination are illegal.
A decrease in the reserve ratio increases the:
A. amount of actual reserves in the banking system. B. amount of excess reserves in the banking system. C. number of government securities held by the Federal Reserve Banks. D. ratio of coins to paper currency in the economy.
If an industry realizes significant economies of scale relative to the size of the market, it is most efficient for there to be a single firm in the industry.
Answer the following statement true (T) or false (F)
Suppose that additional units of capital affect the marginal productivity of labor. This is not unrealistic. Word processors increase the marginal productivity of secretaries
On the other hand, robotic equipment can completely replace a worker and, thereby, lower the marginal productivity of labor. Given this possibility, determine the conditions under which isoquants will not be convex (i.e., concave).