The average consumer at a firm with market power has an inverse demand function of P = 10 ? Q. The firm's cost function is C = 2Q. If the firm engages in two-part pricing, what is the optimal price to charge a consumer for each unit purchased?
A. $1
B. $4
C. $0
D. None of the answers are correct.
Answer: D
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According to the "rational expectations" school of thought in macroeconomics, the short-run Phillips curve is ________ in face of unanticipated changes in monetary policy
A) negatively sloped B) vertical C) positively sloped D) horizontal
Refer to Table 10-7. Suppose Antonio has $10 to spend and the price of beer = $2 per glass and the price of pizza = $2 per slice. How many of each good will he consume when he maximizes his utility?
A) 2 glasses of beer, 3 slices of pizza B) 3 glasses of beer, 2 slices of pizza C) 4 glasses of beer, 5 slices of pizza D) 2 glasses of beer, 1 slice of pizza
Small differences in annual growth rates of real GDP generate large differences in real GDP over time because of the:
A. diminishing returns to capital. B. importance of average labor productivity. C. limits of economic growth. D. power of compound interest.
A price change would have the smallest income effect on a
A. bicycle. B. pair of shoes. C. pack of chewing gum. D. pickup truck.