When deciding what price to charge customers, a firm may choose to charge different prices based on customers'
a. Age
b. Willingness to pay
c. Location
d. All of the above
QUESTION 2Lucy invested 10,000 at the rate of 12. According to the rule of 72, it would take ______ years for her money to double
a. 4
b. 5
c. 6
d. 7
QUESTION 3Indirect price discrimination differs from direct price discrimination because
a. In indirect price discrimination high value consumers can sometimes still get the low price
b. In direct price discrimination firms do not have to worry about cannibalizing
c. Direct price discrimination encourages rivals to enter but indirect discrimination does not
d. There is no difference between the two
QUESTION 4A cloth manufacturing firm is deciding whether or not to invest in new machinery. The machinery costs 45,000 and is expected to increase cash flows in the first year by 25,000 and in the second year by 30,000 . The firm's current fixed costs are 9,000 and current marginal costs are 15 . The firm currently charges 18 per unit. If the interest rate is 5 then the present value of the cash flows is
a. 6,020.41
b. 51,020.41
c. -7,380.95
d. 10,000
QUESTION 5Amusement Park / Cola Tie-in The Six Flags Over Texas amusement part in the middle of the Dallas-Fort Worth Metroplex has a tie-in marketing campaign with Coca-Cola during the summer. In local grocery stores, some Coke cans offer 5 off admission to the park. Why does Six Flags limit these cans so that none are sold further than 20 miles from the park?
QUESTION 6If the interest rate is 11, 1500 received at the end of 12 years is worth how much today?
a. 1500(1+0.11)12
b. 1500/(1 +0 .11)12
c. 1500/(1 + 11)12
d. 1500
QUESTION 7Cowboy Hat Markets Cody's Cowboy Hat Emporium has two stores Fort Worth, TX. One in the Stockyards area that caters to tourists and another a mile further north that caters to ranch hands. Why doesn't Cody sell to both customer types out of one store?
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