An increase in the price level will
A) move the economy down along a stationary aggregate demand curve.
B) move the economy up along a stationary aggregate demand curve.
C) shift the aggregate demand curve to the left.
D) shift the aggregate demand curve to the right.
Question 2
Insurance companies typically charge women lower prices than men for automobile insurance. Is this an example of price discrimination?
A) Yes, because insurance companies can prevent arbitrage; that is, women cannot transfer their insurance coverage to men.
B) No, because there are too many insurance companies for any one company to have market power. A firm must possess market power in order to practice price discrimination.
C) No, because, on average, women have better driving records than men and the costs of insuring men are greater than the costs of insuring women.
D) Yes, because the costs of selling insurance to men and women are the same.
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