Price discrimination is never perfect because:
A) it increases consumer surplus.
B) it is regulated by the government.
C) it lowers profits of producers to an extent.
D) it is impossible to know consumers' willingness to pay.
D
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Because of the problem of second-hand smoke, if unregulated, the market for cigarettes would produce a quantity that is too ____ at a price that is too ____ when compared to the socially optimal results
a. low; low b. high; low c. low; high d. high; high
We have read in this chapter that people with insurance may be more likely to engage in risky behavior because they are insured. Does it make sense then that there should be an "insurance tax" on people that engage in these types of activities?
What will be an ideal response?
Which of the following contributed to the weak recovery from the 2008-2009 recession?
a. constant policy changes that generated uncertainty and undermined private investment b. the restrictive monetary policy followed by the Fed c. the tax increases instituted by a Congress intent on balancing the budget d. the inability of the federal government to borrow because of the sharply higher interest rates
Use the following production possibilities tables to answer the next question.Germany's Production Possibilities ABCDEFAutos (millions)048121620Chemicals (millions)4032241680United States' Production Possibilities ABCDEFAutos (millions)03691215Chemicals (millions)60483624120Assume that prior to specialization and trade Germany and the United States both produced combination C. Now if each nation specializes according to its comparative advantage, the resulting gains from specialization and trade will be
A. 6 million units of autos and 8 million units of chemicals. B. 6 million units of autos. C. 8 million units of autos and 6 million units of chemicals. D. 8 million units of autos.