The practice by a monopolist of charging each buyer the highest price he/she is willing to pay is called A) first-degree discrimination. B) second-degree discrimination. C) third-degree discrimination. D) fourth-degree discrimination. ANSWER A
Date: September 9th, 2020
Give two reasons why Social Security is compulsory for most workers. What will be an ideal response? ANSWER Since the Social Security program redistributes resources as well as provides insurance, it makes sense that it is compulsory for two reasons. First, the redistributive nature of the program makes it a bad deal for high-income […]
Date: September 9th, 2020
The above figure shows an indifference map for a person’s choices between leisure and consumption. Derive this person’s labor supply curve for wage rates of $5, $10, and $15. What will be an ideal response? ANSWER This person’s labor supply curve is downward sloping. The three coordinates for w,H are approximately (5,14 ), (10,11 […]
Date: September 9th, 2020
Which of the following is not one of the leading indicators? A) index of consumer expectations, U. of Michigan B) change in consumer price index for services C) vendor performance, slower deliveries diffusion index D) manufacturers’ new orders, nondefense capital goods ANSWER B
Date: September 9th, 2020
When state universities charge higher tuition fees to out-of-state students than to local students, the universities are practicing A) first-degree discrimination. B) second-degree discrimination. C) third-degree discrimination. D) fourth-degree discrimination. ANSWER C
Date: September 9th, 2020
Empirical evidence from electric-power-producing firms suggests that A) all electric-power-producing firms are natural monopolies. B) no electric-power-producing firms are natural monopolies. C) the largest electric-power-producing firms are natural monopolies. D) the smallest electric-power-producing firms are natural monopolies. ANSWER D
Date: September 9th, 2020
Explain the main difference between the pay-as-you-go system employed by Social Security and a private pension plan. What will be an ideal response? ANSWER Superficially, the two systems look the same. Individuals pay money now in order to receive benefits in the future. The pay-as-you-go system, however, merely takes the contributions from current contributors […]
Date: September 9th, 2020
You are having a party and one of your guests lights up a cigar without asking. Explain why this creates an externality. What will be an ideal response? ANSWER Smoking in an enclosed room forces other guests to inhale smoke which they would not have chosen to inhale if the decision were completely up […]
Date: September 9th, 2020
The Social Security trust fund is an asset to the federal government and a liability, simultaneously. a. True b. False ANSWER b
Date: September 9th, 2020
In order for price discrimination to exist A) markets must be capable of being separated. B) markets must be interdependent. C) different demand price elasticities must exist in different markets. D) demand price elasticities must be identical in all markets. E) Both A and C ANSWER E
Date: September 9th, 2020
