How is it logically possible for a monopolist to get different consumers to purchase different bundles on a menu (such as different sizes of coffee cups), and thereby achieve a form of price discrimination, even if the firm cannot observe the consumers' valuations directly?
a. Different types of consumers have different tradeoffs between money and amounts of the good.
b. The monopolist can use
a market-separation strategy.
c. Social norms are powerful deterrents to lying about one's type.
d. This is impossible: if one bundle is preferred by one type, logically it will be preferred by all.
a
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Suppose that the government enacts a tax on Good X. In order to estimate the effect of the tax on the quantity demanded of a related good, Good Y, we can use the concept of the:
A) price elasticity of demand. B) income elasticity of demand. C) cross-price elasticity of demand. D) cost elasticity of demand.
The base year in the consumer price index (CPI) is:
a. given a value of zero. b. always the first year in the current decade. c. established by law. d. a year chosen as a reference for prices in all other years.
If a country wants to make extensive use of monetary policy to address domestic issues, then that country should adopt a floating exchange-rate.
Answer the following statement true (T) or false (F)
The price paid for the use of money is called:
A. Commission B. Royalty C. Interest D. Rent