Price discrimination is the
A. pricing of a product so that not everyone can afford it.
B. refusal by a firm to sell to all customers.
C. selling of a given product at more than one price when the price difference is unrelated to cost differences.
D. selling of a given product at more than one price when the price differences reflect cost differences.
Answer: C
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Two goods are considered substitutes only if a(n)
a. decrease in the demand for one leads to a decrease in the supply of the other b. increase in the demand for one leads to a decrease in the supply of the other c. increase in the price of one leads to an increase in the demand for the other d. decrease in the price of one leads to an increase in the demand for the other e. decrease in the supply of one leads producers to switch to production of the other
Which of the following is not a characteristic of a perfectly competitive market structure?
a. The firm is a price-taker. b. The firm is a profit maximizer. c. The firm's demand curve is horizontal. d. The market demand is downward sloping. e. The firm can earn an economic profit in the long run.
Given Keynesian assumptions about the shape of the aggregate supply curve and an economy suffering a recession, which of the following is most likely to occur if the Fed pursues expansionary monetary policy?
A. The equilibrium price level and output will both increase until full employment is reached. B. The equilibrium price level and output will both decrease. C. The equilibrium price level will increase but output will stay the same. D. The equilibrium output will increase but the price level will stay the same until full employment is reached.
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y2. C. P3 and Y1. D. P2 and Y3.