Nonlinear price discrimination A) sets the price consumers pay based on quantity purchased. B) is where the firm sets prices in geometrically or exponentially decreasing price points. C) is used in situations where consumers have no reservation prices. D) eliminates deadweight loss. ANSWER A
Date: September 9th, 2020
Rachel spends her income, Y, on Rock Shows (R) and Sunglasses (S) with prices pR and pS. Rachel’s preferences are given by the Cobb-Douglas utility function U(X,Y) = R.8S.2 a. Write out the Lagrangian for Rachel’s utility-maximization problem. b. Use the Lagrangian to derive Rachel’s optimal choice, (R*,S*). c. For a given utility level, U0, […]
Date: September 9th, 2020
A monopolist sells 100 units at $10 per unit and 90 units at $15 per unit. The marginal revenue from the tenth unit is A) $1000. B) $1350. C) $100. D) $350. ANSWER D
Date: September 9th, 2020
The TANF program is generally thought of as being a success because _____. a. welfare rolls have declined significantly since its inception b. welfare spending has declined significantly since its inception c. is similar to the AFDC program while being strictly means-tested d. a and b ANSWER a
Date: September 9th, 2020
If a firm is able to set price, A) it is a monopoly. B) its marginal revenue is constant. C) it sells its output at a constant price. D) it faces a downward-sloping demand curve. ANSWER D
Date: September 9th, 2020
The above figure shows Bob’s utility function. He currently has $100 of wealth, but there is a 50% chance that it could all be stolen. To reduce the chance of theft to zero, Bob is willing to pay A) $20. B) $50. C) $70. D) $80. ANSWER C
Date: September 9th, 2020
For each of the following statements, define all of the underlined terms. Then, explain why the statement is true or false. a. If a consumer views two goods as perfect substitutes then their optimal choice will be a corner solution. b. The substitution effect from a price increase states that the consumer will always choose […]
Date: September 9th, 2020
Which of the following acts as a hostage for employees to behave well? A) on-site childcare where employees take their children while working B) performance bonuses C) training D) bonding ANSWER D
Date: September 9th, 2020
The cross-price elasticity of demand for coffee and tea is likely to be A) greater than zero. B) less than zero. C) zero. D) infinity. ANSWER A
Date: September 9th, 2020
The TANF program was the result of _____. a. the New Deal b. the Great Society programs of President Johnson c. President Reagan’s second term in office d. President Clinton’s desire to end welfare as conventionally understood ANSWER d
Date: September 9th, 2020
