Consider three pricing strategies that the firm can pursue:
a. optimal two-part tariff pricing
b. perfect price discrimination
c. single-price monopoly pricing.
Of these three strategies, which is least likely to benefit society as a whole?
A) single-price monopoly pricing because there are mutually beneficial trades (between consumers and seller) that are not exploited
B) Both perfect price discrimination and two-part tariff pricing do not benefit society because the entire consumer surplus is extracted by the producer.
C) perfect price discrimination because those willing to pay higher prices are forced to subsidize those who are not
D) a two-part tariff pricing because consumers have to pay a fixed fee in addition to a per-unit price
A
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In consumer equilibrium, which of the following is true? a. The marginal utility from the consumption of each good is the same
b. The marginal utility from the consumption of each good is zero. c. The marginal utility from the consumption of the last dollar's worth of each good is the same. d. The total utility from the consumption of each good is the same.
Rent seeking refers to unproductive activity in the pursuit of profit
a. True b. False Indicate whether the statement is true or false
In the short run, tax cuts that are intended to increase aggregate supply have
a. almost no effect on aggregate demand, and a small effect on aggregate supply. b. about an equal effect on both aggregate demand and aggregate supply. c. a much greater effect on aggregate demand than on aggregate supply. d. almost no effect on aggregate supply, and a negative effect on aggregate demand.
Which of the following statements is not true about the consumption function?
A. It shows how consumption is influenced by disposable income. B. The equation is written as C = a + bYD. C. It indicates that consumption is inversely related to disposable income. D. It indicates the rate of consumer spending that will take place at various disposable income levels.