\[\begin{array} { | c | c | c | c | } \hline \begin{array} { c } \text { Quantity } \\ \text { Demanded in } \\ \text { Middle Fall } \\ \text { (tubes per week) } \end{array} & \begin{array} { c } \text { Price per } \\ \text { Tube } \end{array} & \begin{array} { c } \text { Quantity Demanded } \\ \text { in West Fall } \\ \text { (tubes per week) } \end{array} & \begin{array} { c } \text { Price per } \\ \text { Tube } \end{array} \\ \hline 1 & \$ 8 & 1 & \$ 5.00 \\ \hline 2 & 7 & 2 & 4.50 \\ \hline 3 & 6 & 3 & 4.00 \\ \hline 4 & 5 & 4 & 3.50 \\ \hline 5 & 4 & 5 & 3.00 \\ \hline \end{array}\] Neem Products sells its Ayurvedic Neem toothpaste in two completely isolated markets with demand schedules as shown in Table 16-2.The average cost of production is constant at $2 per tube. -Refer to Table 16-2.What is the total revenue received from both markets combined?

A) $30 B) $34 C) $68 D) $70 A) $30 B) $34 C) $68 D) $70

\[\begin{array} { | c | c | c | c | } \hline \begin{array} { c } \text { Quantity } \\ \text { Demanded in } \\ \text { Middle Fall } \\ \text { (tubes per week) } \end{array} & \begin{array} { c } \text { Price per } \\ \text { Tube } \end{array} & \begin{array} { c } \text { Quantity Demanded } \\ \text { in West Fall } \\ \text { (tubes per week) } \end{array} & \begin{array} { c } \text { Price per } \\ \text { Tube } \end{array} \\ \hline 1 & \$ 8 & 1 & \$ 5.00 \\ \hline 2 & 7 & 2 & 4.50 \\ \hline 3 & 6 & 3 & 4.00 \\ \hline 4 & 5 & 4 & 3.50 \\ \hline 5 & 4 & 5 & 3.00 \\ \hline \end{array}\] Neem Products sells its Ayurvedic Neem toothpaste in two completely isolated markets with demand schedules as shown in Table 16-2.The average cost of production is constant at $2 per tube. -Refer to Table 16-2.Which of the following statements is true about the two markets?

A) The demand in Middle Fall is more price elastic than the demand in West Fall. B) The demand in Middle Fall is less price elastic than the demand in West Fall. C) The demand in Middle Fall is more income elastic than the demand in West Fall. D) The demand in Middle Fall is less income elastic than the demand in West Fall. A) The demand in Middle Fall is more price elastic than the demand in West Fall. B) The demand in Middle Fall is less price elastic than the demand in West Fall. C) The demand in Middle Fall is more income elastic than the demand in West Fall. D) The demand in Middle Fall is less income elastic than the demand in West Fall.

Exam 16: Pricing Strategy

The Bay Area subway system,BART,offers senior citizens discounted fares for BART rides.This suggests that BART authorities believe that senior citizens have a ________ demand for subway rides.

(Multiple Choice)

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Question 21

Watanabe Sensei operates the only martial arts school in Hartfield.For simplicity,assume that consumers have identical demand curves and that Sensei knows what this demand curve is.Figure 16-6 shows this demand curve. -Refer to Figure 16-6.With this pricing scheme - a competitive price for the classes and a one-time membership fee - what amount of producer surplus will Sensei earn?

(Multiple Choice)

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Question 22

Arbitrage refers to the act of

(Multiple Choice)

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Question 23

Cost-price pricing typically does not result in profit-maximization.As a result,economists have two views of cost-plus pricing.One of these views is

(Multiple Choice)

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Question 24

Why might a producer practice price discrimination?

(Multiple Choice)

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Question 25

For many products,such as fast foods,a variety of prices can be found,but sellers with higher prices can expect to sell their products because

(Multiple Choice)

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Question 26

Watanabe Sensei operates the only martial arts school in Hartfield.For simplicity,assume that consumers have identical demand curves and that Sensei knows what this demand curve is.Figure 16-6 shows this demand curve. -Refer to Figure 16-6.If Sensei acts as a monopolist,his profit-maximizing price is and the number of classes sold is .

(Multiple Choice)

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Question 27

A perfectly competitive firm cannot practice price discrimination because

(Multiple Choice)

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Question 28

Erin and Deidre,two residents of Ithaca,New York,are planning a trip to Boston.Erin,the sales manager for a large retailer,has to attend a business meeting.Deidre,a college student on vacation,is planning a leisurely trip to visit friends and relatives.Which of the following statements is true?

(Multiple Choice)

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Question 29

Why is it necessary for a firm that practices price discrimination be a price maker rather than a price taker?

(Essay)

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Question 30

Potential Customer Willingness to Pay (dollars per hour) Arun \ 8 Bernice 9 Cara 10 Dawn 12 Julie plans to start a pet-sitting service.She surveyed her neighborhood to determine the demand for this service.Assume that each person surveyed demands only one hour of pet sitting services per period.Table 16-3 above shows a portion of her survey results. -Refer to Table 16-3.Suppose Julie's marginal cost of providing this service is constant at $7 and she charges each customer according to his or her willingness to pay instead of a uniform price of $7.Which of the following statements is true?

(Multiple Choice)

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Question 31

If demand is taken into account,firms that use cost-plus pricing can adjust price by

(Multiple Choice)

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Question 32

With an optimal two-part tariff

(Multiple Choice)

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Question 33

Assume that a monopolist practices perfect price discrimination.The firm's marginal revenue curve will

(Multiple Choice)

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Question 34

Quantity Demanded in Middle Fall (tubes per week) Price per Tube Quantity Demanded in West Fall (tubes per week) Price per Tube 1 \ 8 1 \ 5.00 2 7 2 4.50 3 6 3 4.00 4 5 4 3.50 5 4 5 3.00 Neem Products sells its Ayurvedic Neem toothpaste in two completely isolated markets with demand schedules as shown in Table 16-2.The average cost of production is constant at $2 per tube. -Refer to Table 16-2.What is the total revenue received from both markets combined?

(Multiple Choice)

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Question 35

Quantity Demanded in Middle Fall (tubes per week) Price per Tube Quantity Demanded in West Fall (tubes per week) Price per Tube 1 \ 8 1 \ 5.00 2 7 2 4.50 3 6 3 4.00 4 5 4 3.50 5 4 5 3.00 Neem Products sells its Ayurvedic Neem toothpaste in two completely isolated markets with demand schedules as shown in Table 16-2.The average cost of production is constant at $2 per tube. -Refer to Table 16-2.Which of the following statements is true about the two markets?

(Multiple Choice)

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Question 36

Charging different prices to different consumers for the same product when the price differences are not due to differences in cost is called arbitrage.

(True/False)

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Question 37

Chantal owns a hairdressing salon which caters to two main groups of customers: residents of "The Chateau," a retirement community,and other residents in the neighborhood.Figure 16-3 shows the demand curves for the residents of the retirement community,labeled Market A,and other residents in the neighborhood,labeled Market B.The demand curves are not identical. -Refer to Figure 16-3.Suppose Chantal charges all her customers a uniform price of $10 for a haircut.Which of the following statements is true?

(Multiple Choice)

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Question 38

A firm that engages in price discrimination must be able to identify the preferences of every customer it serves.

(True/False)

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Question 39

A successful strategy of price discrimination requires that a firm be a price taker.

(True/False)

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Question 40

Exam 16: Pricing Strategy

The Bay Area subway system,BART,offers senior citizens discounted fares for BART rides.This suggests that BART authorities believe that senior citizens have a ________ demand for subway rides.

Arbitrage refers to the act of

Cost-price pricing typically does not result in profit-maximization.As a result,economists have two views of cost-plus pricing.One of these views is

Why might a producer practice price discrimination?

For many products,such as fast foods,a variety of prices can be found,but sellers with higher prices can expect to sell their products because

A perfectly competitive firm cannot practice price discrimination because

Erin and Deidre,two residents of Ithaca,New York,are planning a trip to Boston.Erin,the sales manager for a large retailer,has to attend a business meeting.Deidre,a college student on vacation,is planning a leisurely trip to visit friends and relatives.Which of the following statements is true?

Why is it necessary for a firm that practices price discrimination be a price maker rather than a price taker?

If demand is taken into account,firms that use cost-plus pricing can adjust price by

With an optimal two-part tariff

Assume that a monopolist practices perfect price discrimination.The firm's marginal revenue curve will

Charging different prices to different consumers for the same product when the price differences are not due to differences in cost is called arbitrage.

A firm that engages in price discrimination must be able to identify the preferences of every customer it serves.

A successful strategy of price discrimination requires that a firm be a price taker.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

The Economics of Health Care

Firms,the Stock Market,and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

The Markets for Labor and Other Factors of Production

Public Choice, taxes, and the Distribution of Income

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

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