Refer to Figure 16-7. The owners of the Lizard Lounge are ...

[folubunmi]

Refer to Figure 16-7. The owners of the Lizard Lounge are considering the following four pricing options:
 
  a. A single price scheme where the cocktail price equals the monopoly price.
  b. A single price scheme where the cocktail price equals the competitive price.
  c. A two-part tariff: a monopoly cocktail price and a cover charge that will generate total revenue equal to the area X.
  d. A two-part tariff: a competitive cocktail price and whatever cover charge that will generate a total revenue equivalent to the area X + Y + Z.
 
  Which pricing scheme(s) achieve the economically efficient outcome?
  A) schemes a and c B) scheme b C) schemes b and d D) scheme d only

Question 2

If the economy is producing at potential GDP
 
  A) the short-run aggregate supply curve must be vertical.
  B) inflation in the economy is at its natural rate.
  C) the Phillips curve must be positively sloped.
  D) unemployment is at its natural rate.

[1_Step_At_ATime]

Answer to Question 1

C

Answer to Question 2

D