Explain bundling and mixed bundling and the benefits to a multi-product monopolist of such packaging schemes.
What will be an ideal response?
Bundling is the practice of selling several products together as a package and mixed bundling is the practice of selling several products together as a package while also offering those products for sale individually. Bundling and mixed bundling can increase a firm's ability to extract consumer surplus and increase profits. In fact, when the willingness to pay for two goods has the special feature that a dollar higher willingness to pay for one good implies a lower willingness to pay for the other, bundling always yields higher profits, provided marginal cost is zero.
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When the errors are heteroskedastic, then
A) WLS is efficient in large samples, if the functional form of the heteroskedasticity is known. B) OLS is biased. C) OLS is still efficient as long as there is no serial correlation in the error terms. D) weighted least squares is efficient.
Higher efficiency in the economy can be reached if prices are held low by law
a. True b. False Indicate whether the statement is true or false
In the 1960s and early 1970s, many economists and policymakers thought the Phillips curve was
A. interesting, but had no theory behind it. B. invalid and of no use to policymakers. C. of no interest in making macroeconomic policy. D. a “menu” of possible choices available to policymakers.
Which of the following is NOT true about this national income equation:
A) For the current account, CA, to improve, we may have to invest less than otherwise would be the case. B) For the current account, CA, to improve, we may have to save less to maintain the same amount of investment that includes foreign saving. C) For the current account, CA, to improve, the government may have to run budget surplus. D) A reduction in the trade deficit with one country will simply show up as an increase in a trade deficit with another country.