In order to extract the entire consumer surplus, a firm should set prices exactly equal to the price that an individual actually pays
a. True
b. False
Indicate whether the statement is true or false
False
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Which of the following is a necessary condition for successful price discrimination?
A) The seller must possess market power. B) Transactions costs must be zero. C) The buyer must possess market power. D) Buyers must have identical inelastic demands.
Unlike a perfectly competitive firm, a monopolistically competitive firm
a. faces a perfectly inelastic demand curve. b. can earn positive economic profit in the short run and in the long run. c. cannot earn positive economic profit even in the short run. d. has a negatively sloped demand curve.
The present value of $1 million to be received 10 years from now will
a. decrease if the interest rate rises. b. be greater if the funds were going to be received 15 years from now. c. be greater than $1 million. d. increase if the interest rate were to rise from 4 percent to 8 percent.
The payments made to the beneficiaries of the Social Security program are financed by
a. insurance premiums previously paid into the system by the beneficiaries. b. current receipts derived from the Social Security payroll tax. c. income derived from funds that were previously invested in stocks and bonds. d. governmental savings accounts based on the amount of funds the recipient previously paid into the system.