Related to the Economics in Practice on Page 280: the Foreign

question 259

Multiple Choice

Related to the Economics in Practice on page 280: The foreign visitors to the temples of Laos are typically much richer than the local Laotians. Based on the difference in demand elasticity of foreign visitors and local visitors, the optimal strategy for the temples to maximize revenue is to

• A) charge a higher price to foreign visitors than to local residents.
• B) charge a lower price to foreign visitors than to local residents.
• C) charge the same price to foreign visitors and to local residents.
• D) not charge for admission and rely instead on donations from both local residents and foreign visitors.

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Definitions:

Nonparticipating

Refers to an insurance policy, financial instrument, or other contracts that do not entitle the holder to share in the profits or surplus of the issuer.

Cash Dividends

Payments made by a corporation to its shareholders out of its profits or reserves in the form of cash.

Earnings per Share

A financial ratio calculated by dividing a company's net income by its number of outstanding shares of common stock.