To engage in first-degree price discrimination, a firm must:
A. know each consumer's maximum willingness to pay.
B. be able to set P > MC.
C. prevent low-value consumers from reselling to high-value consumers.
D. All of the answers are correct.
Answer: D
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Refer to the above table. If opportunity costs are constant, each nation produces only the one good for which it has a comparative advantage, and trade can occur between the two countries
A) country X will produce product A and country Y will produce product B. B) country X will produce product B and country Y will produce product A. C) country X will refuse to trade with country Y since country X has a comparative advantage in both products. D) country Y will refuse to trade with country X since country Y has a comparative advantage in both products.
Deregulation can solve the problem of regulatory capture and increase economic efficiency:
A. If the deregulated industry quickly evolves into a monopoly B. If the deregulated industry becomes more competitive C. When the regulations covering the industry are tightened D. When the industry ends up generating substantial external costs