Suppose that three consumers are in the market for good X. Consumer 1's (inverse) demand is PX = 40 ? QX; Consumer 2's (inverse) demand is PX = 50 ? 2QX; and Consumer 3's (inverse) demand is PX = 70 ? 4QX. When PX = $20, the market will demand:
A. 19.5 units.
B. 47.5 units.
C. 41 units.
D. None of the statements is correct.
Answer: B
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If deviations from trend in a macroeconomic variable are negatively correlated with deviations from trend in real GDP, that variable is said to be
A) useless in predicting future movements in real GDP. B) procyclical. C) countercyclical. D) acyclical.
Gabby flips a fair coin and it comes up heads. Gabby suffers from the hot-hand fallacy if:
A. she thinks the coin will come up heads on the next flip because it came up heads on the previous flip. B. she thinks the coin will come up tails on the next flip because it came up heads on the previous flip. C. she thinks the coin is less likely to come up heads because it came up heads on the previous flip. D. she thinks the coin is equally likely to come up heads or tails on the next flip.
A compensation structure that generates much higher pay rates for the top performers, while those whose productivity is only a little lower receive substantially less compensation, is called
a. competing differentials. b. winner take all. c. dueling executives. d. tournament pay.
Answer the following statement true (T) or false (F)
1) Extensive network effects may drive a market toward natural monopoly because consumers tend to choose a common, standard product that everyone else is using. 2) Price discrimination occurs whenever a firm sells a good for two different prices. 3) Price discrimination will result in consumers with more elastic demand purchasing more of the good than when a single price is charged to all consumers in the market. 4) Successful price discrimination requires that buyers charged the different prices be physically separated. 5) Price discrimination is illegal in the United States under antitrust regulations.