Table 7.2 contains price, demand, and cost data for the Capri Theater, the only first-run movie theater in a small town. Should the firm adopt the single price policy or the student discount policy?
A. The single price policy because the firm does not meet the three conditions necessary to engage in price discrimination.
B. The single price policy because price discrimination would not be legal for this firm.
C. The single price policy because it is more profitable than price discrimination for this firm.
D. The student discount policy because it is more profitable than the single price policy.
Answer: D
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The formula for the standard error of the regression coefficient, when moving from one explanatory variable to two explanatory variables,
A) stays the same. B) changes, unless the second explanatory variable is a binary variable. C) changes. D) changes, unless you test for a null hypothesis that the addition regression coefficient is zero.
Fiona consumes pizzas and soda with her weekly income of $50 . Suppose pizzas cost $10 and sodas cost $2 . If the price of pizzas rises to $12, then her opportunity cost of consuming a pizza will increase to: a. 5 sodas
b. 6 sodas. c. 10 sodas. d. 12 sodas.
Suppose that at the current level of output, Pat's Hats has fixed costs of $500, variable costs of $1,000 . and $2,000 in total revenue. Which of the following is true?
a. Profit is currently $500 and, in the long run, it will be $1,000 because there will be no fixed costs. b. Profit is currently $500 and, in the long run, it will be $1,500 because there will be no variable costs. c. Profit is currently $500. d. Profit is currently $500, and Pat's Hats will want to decrease its plant size in the long run to lower its fixed costs. e. Pat's Hats will continue to operate as long as revenue is greater than $500.
When you purchase the lower-priced store brand bread instead of the more expensive name brand, you are experiencing
A. a fall in total utility. B. diminishing marginal product. C. the income effect. D. the substitution effect.