Purchasing a season pass to the local symphony
A) is an example of first degree price discrimination.
B) is an example of second degree price discrimination.
C) is an example of third degree price discrimination.
D) All of the above.
B
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The following diagram presents a circular-flow model of a simple economy. The outer set of arrows (shown in green) shows the flow of dollars, and the inner set of arrows (shown in red) shows the corresponding flow of inputs and outputs. Which of the following is true regarding this economic model?
a) Because it does not take into account the role of government, the circular-flow diagram is useless for the purposes of modeling how dollars and resources move throughout an economy.
b) Because it does not take into account international trade, the circular-flow diagram is useless for the purposes of modeling how dollars and resources move throughout an economy.
c) While simple, the circular-flow diagram can still be useful for the purposes of modeling how dollars and resources move throughout an economy.
d) Because, in reality, the economy is very large, the simplicity of the circular-flow diagram makes it useless for the purposes of modeling how dollars and resources move throughout an economy.
When demand is unit elastic, a 10 percent change in the price of the good
A) will cause a change in quantity demanded of less than 10 percent. B) will cause a change in quantity demanded equal to 10 percent. C) will cause a change in quantity demanded greater than 10 percent. D) will not cause any change in quantity demanded.
If the economy suffers a recession for reasons unrelated to fiscal policy, the deficit should rise and
A. inflation should fall. B. interest rates should fall. C. real GDP should fall. D. all of the above are correct.
Suppose a decrease of 7% in the price of lobster increases the consumption of lobster by 18%. Such a price decrease will induce households to spend
A. less of their income on lobster. B. less on products that are complementary with lobster. C. more of their income on lobster. D. the same amount on lobster as before.