The more elastic the supply of a resource,
a. the greater is economic rent as a proportion of total earnings
b. the greater is opportunity cost as a proportion of total earnings
c. the fewer alternative uses the resource has
d. the greater the derived demand for the resource
e. the lower the derived demand for the resource
B
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Normally, whenever the central bank lowers the rate it charges banks for overnight loans market rates of interest:
a. are not affected. b. fall at the same rate. c. increase. d. are unstable.
Refer to Figure 16-7. The owners of the Lizard Lounge are considering the following four pricing options:
a. A single price scheme where the cocktail price equals the monopoly price.
b. A single price scheme where the cocktail price equals the competitive price.
c. A two-part tariff: a monopoly cocktail price and a cover charge that will generate total revenue equal to the area X.
d. A two-part tariff: a competitive cocktail price and whatever cover charge that will generate a total revenue equivalent to the area X + Y + Z.
Which pricing scheme(s) achieve the economically efficient outcome?
A) schemes a and c B) scheme b C) schemes b and d D) scheme d only