You are given the following information about the economy: the nominal interest rate = 8 percent; the real rate of interest = 6 percent. The inflation premium is:
A. 2 percent
B. 6 percent
C. 8 percent
D. 14 percent
A. 2 percent
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Which of the following is NOT a condition for third degree price discrimination?
A) Monopoly power B) Different own price elasticities of demand C) Economies of scale D) Separate markets
When government regulations force a natural monopoly to produce where price equals average total cost, social welfare is
a. maximized b. less than it would be without regulation c. greater than it would be without regulation, but it is not maximized d. exactly the same as it would be without regulation e. minimized
Under a market system of resource allocation
a. prices determine what consumers buy while the government determines what firms produce b. prices determine what firms produce while the government determines what consumers buy c. prices determine both what firms produce and what consumers buy d. the government determines both what firms produce and what consumers buy e. the government allocates resources while prices allocate goods and services
For a monopolist, the quantity effect:
A. is the decrease in revenues from selling a greater quantity at a lower price. B. is the increase in revenues from selling a greater quantity at a lower price. C. is always outweighed by the price effect. D. always outweighs the price effect.