Suppose a ski resort decides to sell its lift tickets "below cost" all season long, charging $20 per day as opposed to $30 per day. In principle, how would each ticket sale affect GDP?
A) GDP would fall by $10.
B) GDP would rise by $10.
C) GDP would rise by $20.
D) GDP would rise by $30 after the appropriate cost-price adjustment has been made.
C
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A country can consume outside its production possibilities curve by trading.
Answer the following statement true (T) or false (F)
Refer to Figure 16-7. The owners of the Lizard Lounge are considering the following four pricing options:
a. A single price scheme where the cocktail price equals the monopoly price.
b. A single price scheme where the cocktail price equals the competitive price.
c. A two-part tariff: a monopoly cocktail price and a cover charge that will generate total revenue equal to the area X.
d. A two-part tariff: a competitive cocktail price and whatever cover charge that will generate a total revenue equivalent to the area X + Y + Z.
Which pricing scheme(s) achieve the economically efficient outcome?
A) schemes a and c B) scheme b C) schemes b and d D) scheme d only
Why didn't the Fed's quantitative easing policies exert a stronger impact on aggregate demand and lead to a more rapid recovery during 2010-2012?
a. The low interest rates accompanying the policy failed to increase stock prices. b. Even though the Fed made additional reserves available to the banking system, the policy did not result in lower interest rates. c. The velocity of money increased, partially offsetting the impact of the Fed's low interest rate policy. d. The earnings of senior citizens and others from money market accounts, saving deposits, and other forms of savings fell, reducing their incentive to spend and thereby increasing aggregate demand.
The accompanying figure shows the demand curve for a product that can be sold only in whole-number amounts.
What is the maximum price that any buyer would be willing to pay for the first unit?
A. 15 B. 25 C. 35 D. 40