If marginal cost is zero, with an optimal two-part tariff
A) total revenue is maximized.
B) the firm does not have to charge a fixed-fee portion.
C) consumers maximize their surplus
D) firms may not maximize profit.
A
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Suppose the nominal price of gasoline was $0.90 per gallon in 1987. To convert this value to the real price of 1987 gasoline in 2012 dollars, we should:
A) multiply by the 1987 CPI and divide by the 2012 CPI. B) multiply by the 2012 CPI and divide by the 1987 CPI. C) not do anything because this is the real price in 2012 dollars. D) none of the above
If a nation has a higher level of technology than another nation it can produce:
A. more with no use of human capital. B. more outputs with the same level of physical capital. C. less with the same amount of physical capital. D. the same output with the same level of inputs.