Question:

Which would definitely not be an example of price discrimination?

A.

a theater charges children less than adults for a movie.

B.

universities charge higher tuition for out-of-state residents.

C.

a doctor charges for services according to the income of patients.

D.

an electric power company charges less for electricity used during off-peak hours when

Answer» d. an electric power company charges less for electricity used during off-peak hours when

Question:

When there is High capital mobility the BP curve is:

A.

Negative

B.

positive

C.

Vertical

D.

Horizontal

Answer» d. Horizontal

Question:

Income elasticity is positive, but less than unity in the case of:

A.

Necessity

B.

Luxury

C.

Inferior

D.

Substitutes

Answer» a. Necessity

Question:

When both the price of a substitute and the price of complement of X rises, the demand for X:

A.

Rises

B.

Falls

C.

Remains unchanged

D.

All of the above is possible

Answer» d. All of the above is possible

Question:

Branding can be good for society because:

A.

it allows people to show off the branded goods they use or wear

B.

it keeps generic goods from taking over the market

C.

it provides useful information to consumers about the quality of branded goods

D.

it helps firms enjoy higher prices and profits

Answer» c. it provides useful information to consumers about the quality of branded goods

Question:

Which of the following is a barrier to entry that typically results in monopoly?

A.

The firm controls the entire supply of a raw material

B.

Production of the industry\s product is subject to economies of scale over a broad range of output

C.

Production of the industry\s product requires a large initial capital investment

D.

The firm holds an exclusive government franchise

Answer» c. Production of the industry\s product requires a large initial capital investment

Question:

The validity of an economic theory is judged by its power to:

A.

Explain an economic phenomenon

B.

Predict the course of an economic phenomenon

C.

Prove or disprove a hypothesis

D.

Reveal the economic laws

Answer» a. Explain an economic phenomenon

Question:

If factor prices and factor quantities move in the same direction, we have

A.

a constant cost industry

B.

an increasing cost industry

C.

a decreasing cost industry

D.

any of the above.

Answer» b. an increasing cost industry