After analyzing his opponent, a tennis player decides to serve 10% of his serves to the left, 50% of his serves to the right, and 40% of his serves at the body of his opponent. This illustrates a A) deterministic strategy. B) dominant strategy. C) mixed strategy. D) non-game theoretic problem. ANSWER C
Date: September 9th, 2020
If you purchase one pound of apples the price is $1.50 per pound. If you buy a five pound bag of apples, the cost is $5.00. This is most likely an example of A) quantity discounts. B) lower marginal cost. C) lower marginal benefit. D) price gouging. ANSWER A
Date: September 9th, 2020
If firms that practice second degree price discrimination use more block prices, A) both consumer surplus and welfare will decrease. B) both consumer surplus and welfare will increase. C) consumer surplus will decrease, but welfare will increase. D) consumer surplus will increase, but welfare will decrease. ANSWER C
Date: September 9th, 2020
A hotel with market power charges customers who check in before 5:00 pm more than those who check in after 5:00 pm. Those who check in early are much more likely to use the hotel’s pool. Explain why this price difference may not be price discrimination. What will be an ideal response? ANSWER The […]
Date: September 9th, 2020
What is one reason consumers might demand a discount for quantity purchases? A) higher storage costs B) lower marginal cost C) lower marginal benefit D) price gouging ANSWER A
Date: September 9th, 2020
Which of the following is a simultaneous decision game? A) Tic-tac-toe B) Chess C) Poker D) Rock-paper-scissors ANSWER D
Date: September 9th, 2020
If the demand for air travel were to change so that business travelers and vacationers have the same price elasticity of demand for air travel, A) airlines would charge the same price to each type of flyer. B) airlines would still charge business flyers a higher fare since the traveler’s employer pays anyway. C) airlines […]
Date: September 9th, 2020
A weapons producer sells guns to two countries that are at war with each other. The guns can be produced at a constant marginal cost of $10. The demand for guns from the two countries can be represented as: QA = 100 – 2p QB = 80 – 4p Why is the weapons producer able […]
Date: September 9th, 2020
What is a primary difference between rebates and coupons? A) Coupons allow individuals to sort themselves into the high-elasticity group after the sale. B) Neither coupons nor rebates are redeemed in high numbers. C) Rebates allow individuals to sort themselves into the high-elasticity group after the sale. D) Coupons are legal and rebates are illegal. […]
Date: September 9th, 2020
If the marginal cost of production is $10, the elasticity of demand for group 1 is -1.5, the elasticity of demand for group 2 is -2.5, and the price paid by group 1 is $15, the price for group 2 is A) $8.33. B) $27. C) $15. D) Impossible to tell. ANSWER A
Date: September 9th, 2020
