McDonald's charges a higher price for a Big Mac in New York City than it does in a small town in Iowa. Is this an example of third-degree price discrimination? Explain
What will be an ideal response?
No, or not necessarily. Costs differ between the two markets, because land is more expensive in New York City. Thus the higher price reflects that.
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Suppose that Rosa is considering migration to another country. To move, she will have to spend $5000 on transportation and $4000 in application and other processing fees. Rosa's stream of future earnings in her home country is $500,000. She expects to earn a stream of future earnings of $800,000 in another country. Based on this information, Rosa will decide to migrate as long as the implicit costs of leaving her friends and family and adjusting to a new culture are:
A. Greater than $509,000 B. Less than $300,000 C. Less than $91,000 D. Less than $291,000
Everything else held constant, the interest rate on municipal bonds rises relative to the interest rate on Treasury securities when
A) income tax rates are lowered. B) income tax rates are raised. C) municipal bonds become more widely traded. D) corporate bonds become riskier.
Free markets produce relatively high levels of efficiency but low rates of growth.
Answer the following statement true (T) or false (F)
You and your roommate plan to start a business after college selling pagers. You have personal assets of $20,000 . and she has personal assets of $15,000 . You plan to invest $12,00 . in the business while she plans to invest $8,000 . If the business
goes bankrupt with assets of $20,00 . and liabilities of $50,000 . describe how much each of you stand to lose if you organize (a) as a partnership, and (b) as a corporation.