The WWQX Co sells shirts. Shirts with the company label on the tag are perceived to be of higher quality than shirts with the store's label. Yet, shirts are of identical quality regardless of the label. The demand for perceived high-quality shirts is ph = 80 - qh. The demand for perceived low-quality shirts is pl = 19 + ph - ql. The firm can produce shirts at TC = 2qh + 2ql. What prices are
charged for the low-quality and for the high-quality shirts?
A) pl = 31; ph = 41
B) pl = 51; ph = 41
C) pl = 17; ph = 45
D) pl = 35; ph = 28
A
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A person keeps $500 in his home in order to be prepared for some unforeseen future event. This reflects his
A) speculative demand for money. B) asset demand for money. C) liquidity demand for money. D) precautionary demand for money.
France has a higher natural rate of unemployment than the United States. This suggests that
a. France is at a higher point on its long-run Phillips curve and so has higher inflation than the United States. b. France is at a lower point on its long-run Phillips curve and so has lower inflation than the United States. c. France's Phillips curve is to the left of that of the United States, possibly because they have higher inflation. d. France's Phillips curve is to the right of that of the United States, possibly because they have more generous unemployment compensation.