Provide some real-world examples of price discrimination in action
What will be an ideal response?
Examples are very common place. Airlines routinely charge those who stay over Saturday nights a much lower fare than those who do not. Movie theatres, hotels and restaurants routinely charge a lower price for children and the elderly.
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"As the saying goes, the only sure things in life are death and taxes. This saying points out the result that everything having to do with taxes is an automatic fiscal policy." Is the preceding analysis correct or incorrect? Explain your answer
What will be an ideal response?
Risk-averse individuals will diversify their investments because this will:
a. increase their expected returns. b. provide them with some much-needed variety. c. reduce the variability of their returns. d. reduce their transaction costs.
A positive temporary supply side shock will:
A. increase the level of potential output in the long run. B. decrease the price level in the long run. C. increase the price level in the long run. D. have no effect in the long run.
Tyler purchases 5 pounds of hot dogs per month when his monthly income is $2,000 and 4 pounds of hot dogs per month when his monthly income is $2,200 . Tyler's income elasticity of demand for hot dogs is
a. 2.33, and hot dogs are a normal good. b. -2.33, and hot dogs are an inferior good. c. 0.43, and hot dogs are a normal good. d. -0.43, and hot dogs are an inferior good.