Suppose a monopoly sells to two identifiably different types of customers, A and B, who are unable to practice arbitrage. The inverse demand curve for group A is PA = 10 - QA, and the inverse demand curve for group B is PB = 18 - QB
The monopolist is able to produce the good for either type of customer at a constant marginal cost of 2, and the monopolist has no fixed costs. If the monopolist practices group price discrimination, the profit maximizing prices charged to each type of customer are A) PA = 6, and PB = 10.
B) PA = 4 and PB = 8.
C) PA = 10, and PB = 6.
D) PA = 8, and PB = 4.
A
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Between 1991 and 2008, the federal minimum wage increased from $4.25 per hour to $6.55 per hour, while the CPI increased from 136.2 to 215.3 . We can conclude from this that
a. the minimum wage increased in nominal and in real terms. b. the minimum wage decreased in nominal terms but increased in real terms. c. the minimum wage increased in nominal terms but decreased in real terms. d. more information is needed to determine what happened to the real minimum wage over the period.
On the Heritage Foundation's scale of "Economic Freedom," which of the following factors contribute to "Economic Freedom"?
A. high tariffs to protect domestic jobs B. a vibrant labor union movement C. a guaranteed minimum wage D. a legal system conducive to business