A monopolist who has a ________ ATC schedule and charges the same monopoly price to all buyers appropriates less consumer surplus as profit than a perfect price discriminator does.
A. horizontal
B. vertical
C. U-shaped
D. downward-sloping
Answer: A
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Russia, Iran and Qatar made the first serious moves in October 2008 toward forming an OPEC-style cartel for natural gas. Each of the countries can comply with the cartel agreement or to cheat on the cartel agreement
If all countries comply, the economic profit for each will be $140 million. If one country cheats, that country earns $200 million in economic profit and the other countries will have economic losses of $10 million. If all countries cheat, they break even. What are the strategies in this game? A) Comply with the cartel agreement or to cheat on the cartel agreement. B) Comply with the agreement and earn $140 million in profit. C) Cheat on the cartel agreement and earn -$10 million in profits. D) Earn between $140 and $200 million in profits.
If a good is a normal good then
a. other things equal, no consumer will buy it b. a rise in income or wealth will increase the amount of the good that consumers will purchase c. a decline in income will increase the amount of it that consumers will purchase d. abnormal goods are never substituted for it e. normal consumers will always demand it
If the government establishes a price floor at 75 percent of parity, this would imply that
a. price ceilings on farm goods must be 125 percent of parity b. price ceilings on farm goods must be 25 percent of parity c. farm prices can be no less than 75 percent of their 1910–1914 level d. farm prices can only rise to 75 percent of their 1910–1914 level e. farmers' purchasing power will be no less than 75 percent of 1910–1914 purchasing power
Choose the incorrect statement.
A) When the quality of a good improves over time and as a result the price rises, the CPI counts the entire price rise as inflation and so overstates inflation. B) The outlet substitution bias injects an upward bias into the CPI. C) The CPI basket is constantly updated to allow for the introduction of new goods. D) When relative prices change and people substitute to the lower priced good, the CPI ignores the substitution and the CPI overstates inflation. E) All of the above statements are incorrect. C) The CPI basket is constantly updated to allow for the introduction of new goods.