A movie monopolist sells to students and adults. The demand function for students is QdS = 600 - 100P and the demand function for adults is QdA = 1,200 - 100P. The marginal cost is $2 per ticket. Suppose the movie theater can price discriminate. What is the monopolist's profit from both students and adults?
A. $2,900
B. $2,500
C. $2,100
D. $4,900
A. $2,900
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With a temporary income tax surcharge, according to the ________, household consumption should ________
A) PIH; fall as disposable income falls B) PIH; rise since the decrease is disposable income is temporary C) LCH; fall since disposable income over the lifecycle falls D) None of the above is correct since a temporary change affects neither permanent income or relative lifecycle earnings.
Which of the following is true of the demand curve for a normal good? a. The shape of the individual demand curve for a normal good is necessarily linear
b. The slope of the individual demand curve for a normal good is necessarily positive. c. The shape of the individual demand curve for a normal good can either be linear or non-linear. d. The slope of the individual demand curve for a normal good can either be positive or negative.
When the money supply increases
a. interest rates fall and so aggregate demand shifts right. b. interest rates fall and so aggregate demand shifts left. c. interest rates rise and so aggregate demand shifts right. d. interest rates rise and so aggregate demand shifts left.
A hypothesis that assumes that people combine the effects of past policy changes on economic events and their own judgment about future effects of current and future policy changes is known as
A. active expectations. B. adaptive expectations. C. irrelevant expectations. D. rational expectations.