Refer to the scenario above. Suppose you decide to buy a Toyota Corolla. You value the car for $10,000. You don't know it, but the car dealer values it for $8,500. Which of the following is likely to be true?
A) You will end up buying a high-quality car.
B) You will end up buying a bad-quality car.
C) You will end up earning a positive consumer surplus.
D) You will choose not to buy the car.
B
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Starting at the top of a straight-line downward sloping demand curve, as the price falls, total expenditures will
A) initially increase and then decrease. B) initially decrease and then increase. C) increase along the entire demand curve. D) decrease along the entire demand curve.
When the movie Jurassic Park debuted in Westwood, California, the price of tickets was $7.50. After several months the ticket price had fallen to $4.00. This is an example of
A) peak-load pricing. B) second-degree price discrimination. C) a two-part tariff. D) tying. E) none of the above