From an economic perspective, price discrimination is desirable because
A) the increase in profits is more than offset by the loss in consumer surplus, resulting in a net increase in economic surplus.
B) it redistributes wealth from wealthy consumers to highly innovative firms.
C) it enables firms to increase profits with no loss in economic surplus, and in turn, this could provide firms with incentives to engage in beneficial product innovation.
D) the increase in profits results in higher corporate tax revenues received by the government which could be used to subsidize consumption for low-income individuals.
C
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Timmy and Tommy are considering contributing to a project. If both contribute, each receives a payoff of 20. If neither contribute, each receives a payoff of 10
If only one person contributes, the person who contributes receives a payoff of 14 and the person who does not contribute receives a payoff of 18. Will the public goods problem prevent this project from being completed? Explain why or why not.
If a rent ceiling is set below the equilibrium price, thus creating a ________, housing may be allocated by increasing search activity or creating a ________
A) shortage; black market B) shortage; free market C) surplus; black market D) surplus; open market E) surplus; free market
There is no market failure if
A. the marginal private cost curve is upward sloping. B. the demand curve (for a good or service) is downward sloping. C. the demand curve lies about the marginal private cost curve. D. marginal private costs are greater than the external costs associated with a negative externality. E. none of the above
In the 12-month period ended in July, the most recent reported by the DOT, Southwest was ____ in on-time performance among major airlines.
Fill in the blank(s) with the appropriate word(s).