A firm's objective behind charging different prices to different ...

[skymedlock]

A firm's objective behind charging different prices to different consumers for the same good is to:
 
  A) enhance goodwill.
  B) enhance its profits.
  C) enhance social surplus.
  D) enhance its market power.

Question 2

Jean can either type her term paper or create Web pages during the limited time she has available. The table above shows her PPF.
 
  a) Can Jean type 90 pages and create 2 Web pages? b) Use the above numbers to calculate the opportunity cost of a typed page as she increases her time typing and decreases time creating a Web page.

[frre432]

Answer to Question 1

B

Answer to Question 2

a) Jean cannot type 90 pages and create 2 Web pages because, as row D shows, that combination is beyond her PPF.

Movement from Increase in typed pages Decrease in Web pages Opportunity cost
A to B 40 1 1/40
B to C 30 1 1/30
C to D 20 1 1/20
D to E 10 1 1/10

b) The opportunity cost is the ratio of the decrease in the number of Web pages divided by the increase in the number of typed pages. The table above gives the opportunity cost for typed pages.