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Economics MCQs Set

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Question;Question 1After acquiring a substitute product, to achieve greater profitability, one should:a. Raise price on both products, but raise price more on the less price elastic productb. Raise price on both products, but raise price more on the more price elastic productc. Raise price on just the more price elasticd. Raise price on just the less price productQuestion 2Firms tend to raise the price of their goods after acquiring a firm that sells a substitutegood because:a. There is an increase in the overall demand for their productsb. They lose market powerc. The bundle has a more inelastic demand than individual goodsd. The bundle has a more elastic demand than individual goodsQuestion 3Firms tend to lower the price of their goods after acquiring a firm that sells acomplementary good because:a. There is an increase in the overall demand for their productsb. They gain market powerc. The bundle has a more inelastic demand than individual goodsd. The bundle has a more elastic demand than individual goodsQuestion 4If promotional expenditures make demand:a. Less elastic, then you should reduce price when you promote the productb. More elastic, then you should increase price when you promote the productc. More elastic, then you should reduce price when you promote the productd. Less inelastic, then you should increase price when you promote the productQuestion 5Domino Sugar Company is considering buying Fisher Honey Company for $100 million.Based on information obtained from 500 supermarkets around the country, when theprice of 1 lb. of Domino Sugar went on sale from $2.00 to $1.50, the average number of 1lb. boxes of sugar rose from 200 boxes in a week to 300 boxes. The following week,when 1 lb. boxes of Fisher Honey went on sale for $2.50 from the original price of $3.00,the number of boxes of honey sold increased from 200 to 275 boxes. If the sale of FisherHoney to Domino Sugar goes through, what changes to each products price DominoSugar make?a. Increase the price of both, but increase the price of Fisher Honey moreb. Increase the price of both, but increase the price of Domino Sugar morec. Lower the price of bothd. No changeQuestion 6For a firm to maximize total profits through price discrimination, it should:a. Charge the same price to both sets of consumers by maximizing at MR=MC on theinelastic demandb. Charge a high price to consumers with an inelastic demand and low price to consumerswith an elastic demandc. Charge the same price to both sets of consumers by maximizing at MR=MC on theelastic demandd. Charge a low price to consumers with an inelastic demand and high price to consumerswith an elastic demandQuestion 7Assume that the price elasticity of demand for movie theatres is -.85 during all eveningshows but for all afternoon shows the price elasticity of demand is -2.28. For the theatreto maximize total revenue, it should:a. Charge a higher price for the afternoon shows and lower price for the evening shows,holding other things constantb. Charge a lower price for the afternoon shows and higher price for the evening shows,holding other things constantc. Need more informationd. Charge the same price for both shows, holding other things constantQuestion 8In theory, price discrimination:a. Decreases consumer surplusb. Reduces the number of consumers who purchase the firms productc. Has no effect on deadweight lossd. Decreases producer surplusQuestion 9Charging prices closer to what consumers are willing to pay for a good:a. None of the aboveb. Reduces consumers surplus and Increases producer surplusc. Increases producer surplusd. Reduces consumers surplusQuestion 10When a firm practices perfect price discrimination:a. Producer surplus is maximized, and demand curve is marginal revenue curveb. Producer surplus is maximizedc. The demand curve is very elasticd. The demand curve is the marginal revenue curvee. Producer surplus is minimizedQuestion 11Indirect price discrimination differs from direct price discrimination because:a. In direct price discrimination there is a risk of creating profitable entries for rival butfor indirect price discrimination, this can be avoidedb. In Direct price discrimination firms do not have to worry about cannibalizingc. In direct price discrimination high value consumers can sometime enjoy the benefits ofa low-values customerd. There is no difference between the twoQuestion 12Firms can practice indirect price discrimination by:a. All of themb. Offering volume discountsc. Offering a bundle containing a number of unitsd. Using two-part pricingQuestion 13When a firm practices perfect price discrimination:a. The demand curve is very elasticb. The marginal cost curve is the average cost curvec. The demand curve is the marginal revenue curved. The demand curve is very inelasticQuestion 14The higher cost for a refundable airline ticket for business travelers can be explained by:a. Bundlingb. Price discriminationc. Indirect price discriminationd. Marginal revenue vs. marginal costQuestion 15Why might a company use an indirect price discrimination scheme versus direct pricediscrimination?a. The demand for each customer type is the sameb. The company can prevent arbitrage between its different customer typesc. The different customer types cannot be uniquely identified directlyd. The different customer types shop at different stories

 

Paper#56096 | Written in 18-Jul-2015

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