Consider a monopolist which sells output in two markets, the home market and the foreign market. Initially the monopolist is unable to price discriminate and sets a single price for both markets
However, the demand in the foreign market is such that at the price the monopoly sets, no goods are sold in the foreign market. If the monopolist is then able to price discriminate, will the overall deadweight loss increase or decrease? Explain.
Since the monopolist is not pricing the good to sell in the foreign market, the price the monopolist sets when setting a single price is the same as if the monopolist were to only sell to the home market.
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If everyone earned the same income, the Lorenz curve would be
A) a rectangular hyperbola. B) a straight line from the origin at a 45-degree angle. C) the horizontal axis. D) very bowed from the diagonal.
If you put $500 into a checking account, the immediate effect (do not consider the money multiplier which we will study in the next chapter) is:
a. M1 rises, M2 falls, and the monetary base remains the same. b. M1 falls, M2 falls, and the monetary base remains the same. c. M1 rises, M2 rises, and the monetary base remains the same. d. M1, M2, and the monetary base rise. e. M1, M2, and the monetary base remain the same.
By definition, there is discrimination when the marketplace offers different opportunities to similar individuals who differ only by
a. race, ethnic group, sex, age, or other personal characteristics. b. qualifications, experience, or job preferences. c. levels of human capital. d. All of the above are correct.
If the firm has already reached the minimum efficient scale, then:
A. any additional output will not result in a lower long run average cost. B. any additional output will result in a lower long run average cost. C. additional output will result in a lower long run marginal cost. D. the firm is profit maximizing in the long run.