For the practice of price discrimination to be successful, the monopoly must:
a. be able to prevent resale of its product.
b. face similar demand curves for various markets.
c. have similar costs among markets.
d. have a downward sloping marginal cost curve.
a
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If the absolute price elasticity of demand is 2.0, a 5 percent decrease in price will increase quantity demanded by
A) 10 percent. B) 20 percent. C) 25 percent. D) 5 percent.
Which economic question does the decision to produce butter instead of guns answer?
a. What to produce? b. How to produce? c. For whom to produce? d. Who has a comparative advantage in gun production? e. Who has an absolute advantage in butter production?
Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. The workers in Country A should specialize in __________________ because they possess the ___________________ in the production of that good.
A. bananas; comparative advantage B. tomatoes; comparative advantage C. bananas; absolute advantage D. tomatoes; absolute advantage
Which of the following can be categorized as derived demand?
a. A decline in the demand for building products following a drop in housing demand. b. An increase in demand for gasoline following a fall in the price of petroleum products. c. An increase in the demand for woolens in winter. d. A decline in the demand for labor on account of outrageous demands of trade unions.