For a firm to maximize total profits through price discrimination, it should
a. Charge a high price to consumers with an inelastic demand and low price to consumers with an elastic demand
b. Charge a low price to consumers with an inelastic demand and high price to consumers with an elastic demand
c. Charge the same price to both sets of consumers
d. Charge nothing to both set of consumers-throw a party
QUESTION 2A publisher is deciding whether or not to invest in a new printer. The printer would cost 500, and it would increase cash flows by 600 for the next two years. What is the present value of the cash flows from the investment?
a. 1100
b. 541
c. 600
d. 1041
QUESTION 3Which of the following would be illegal according to the Robinson-Patman Act
a. Party Packers getting 10cents off every pack of ribbon they buy after 1000 units
b. Sideline Superstore receiving 50 cents off a crate of strawberries since it buys from many other suppliers
c. Sam's Sandwiches receiving 5 cents off per pound of cheese, since they are closer to the warehouse of the supplier
d. None of the above
QUESTION 4The higher the interest rates
a. the more value individuals place on future dollars
b. the more value individuals place on current dollars
c. individuals do not place any importance on either current or future dollars
d. does not affect the investment strategy
QUESTION 5Which of the following would not be illegal according to the Robinson-Patman Act
a. Party Packers getting 10cents off every pack of ribbon they buy after 1000 units
b. Fred's Farms offering 50 cents off a crate of strawberries to retailers to match other suppliers with similar rates
c. Sam's Sandwiches receiving 5 cents off per pound of cheese
d. All of the above
QUESTION 6Cooling systems II Carl is the lead engineer on a smart HVAC cooling system that works with minimal energy and is voice activated. Given the revolutionary nature of the system, it took many failed tries to create a system that actually worked, a cost of 30,000 . Now each unit sells for 6500 and it costs 5000 in raw materials and labor to produce. Carl receives an order for four new units for a customer, but when he takes the order to his manager, the manager is enraged and asks Carl why he wanted to produce something at a loss. What costs would the manager be looking at to come to this conclusion?
QUESTION 7Criticisms of the Robinson-Patman act
a. It can reduces consumer surplus
b. It can reduces producer surplus
c. It can creates inefficiency through unconsummated transactions
d. All of the above
QUESTION 8Cooling systems Carl is the lead engineer on a smart HVAC cooling system that works with minimal energy and is voice activated. Given the revolutionary nature of the system, it took many failed tries to create a system that actually worked, a cost of 30,000 . Now each unit sells for 6500 and it costs 5000 in raw materials and labor to produce. What costs should Carl take into consideration when deciding to service the order for an additional unit?
QUESTION 9The __________ declared that some forms of price discrimination is illegal, especially when it decreases competition.
a. Robinson-Patman Act
b. Sherman Antitrust Act of 1890.
c. Merger Act
d. Federal Trade Commission Act.
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