Ramsey prices for a budget-constrained (breakeven) multi-product firm will allow the same welfare loss per dollar of contribution to fixed costs for every product
Indicate whether the statement is true or false
T Optimal prices for the multi-product firm, which must exceed marginal costs in order to yield enough contribution to cover fixed cost, should be adjusted until the contribution to fixed cost per unit of revenue is the same for each product. If this was not true, an adjustment in prices could allow more contribution with less welfare loss. Prices that reach that standard of equal contribution per dollar of revenue are Ramsey prices.
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Answer the following questions true (T) or false (F)
1. New Keynesian macroeconomic theory emphasizes the role of "sticky" prices in the economy. 2. Centrally planned economies tend to grow more quickly than market economies. 3. Accumulating a greater number of inputs will ensure that an economy will experience economic growth.
Exhibit 6-1 Total utility for good X Total utility (utils)0 80 120 148 160 155 Quantity consumed per day0 1 2 3 4 5 As shown in Exhibit 6-1, the marginal utility for the second unit consumed is:
A. 0. B. 40. C. 80. D. 200.