The WaveHouse on Mission Beach in San Diego features the Bruticus Maximus, a ten foot wave, which tests the skills of even the most talented surf and wake board riders on the planet
WaveHouse is the only place in San Diego where this service is offered. You can ride B. Max for $40 for the first hour, $33 for the second hour, and $26 for the third hour. Why would WaveHouse charge different prices for each subsequent hour of riding? A) to capture consumer surplus among groups of buyers
B) to capture consumer surplus among units of a good
C) to create customer loyalty
D) to encourage skill development
B
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The expenditure multiplier equals 5 and there is a $3 million increase in investment. Equilibrium expenditure
A) increases by $5 million. B) increases by $0.60 million. C) increases by $15 million. D) decreases by $15 million. E) increases by $3 million.
Athos, Porthos,and Aramis each like to take fencing lessons. The price of a fencing lesson is $11 . Athos values a lesson at $16, Porthos at $14, and Aramis at $12 . Suppose that if the government taxes fencing lessons at $2 each, the price will rise to $13 . A consequence of the tax is that consumer surplus shrinks by
a. $4 and tax revenues increase by $6, so there is a deadweight loss of $2. b. $6 and tax revenues increase by $6, so there is no deadweight loss. c. $5 and tax revenues increase by $6, so there is no deadweight loss. d. $5 and tax revenues increase by $4, so there is a deadweight loss of $1.