Suppose the monopolist only sold the goods separately. What price will the monopolist charge for ...

Suppose the monopolist only sold the goods separately. What price will the monopolist charge for Good 2 to maximize revenues for good 2?
 a. 2,300
  b. 2,800
  c. 1,200
  d. 1,700

QUESTION 2

Often economists measure the loss in consumer surplus by looking at the changing area below the Marshallian demand curve. This approach will provide a more accurate measure of the compensating variation of such a price increase if:
 a. the good occupies a small portion of a person's budget.
 b. the good occupies a large portion of a person's budget.
 c. the good has many close substitutes.
 d. the good has few substitutes.

QUESTION 3

In the electric power industry, residential customers have relatively ____ demand for electricity compared with large industrial users. But contrary to price discrimination, large industrial users generally are charged ____ rates.
 a. similar, similar
  b. elastic, lower
  c. elastic, higher
  d. inelastic, lower
  e. inelastic, higher

QUESTION 4

Anti-depressants Roche developed a treatment for a rare form of depression that kept patients feeling fine and kept them functioning normally. Sufferers greatly preferred this treatment over alternatives that would tend to put them into a near-catatonic stupor. However, for a subset of the population with high levels of a certain enzyme, the drug could cause permanent damage and death. So Roche required regular blood tests, and refused to sell to any patients who's levels of this enzyme became elevated. Many blood labs sued to be allowed to perform these blood tests. Why was Roche reluctant to allow third-party blood tests?

QUESTION 5

Suppose the monopolist only sold the goods separately. What price will the monopolist charge for Good 1 to maximize revenues for good 1?
 a. 2,300
  b. 2,800
  c. 1,200
  d. 1,700

QUESTION 6

Here are three possible definitions of Compensating Variation: I. the amount a person would be willing to pay to avoid a price increase. II. the amount of additional income needed to allow a person to restore his or her utility back to its initial level after it has been reduced by a price increase. III. the amount of income that a person who experienced a price increase would be willing to pay to see the price return to its earlier level. Which of these definitions is (are) correct?
 a. Only I
 b. I and II
 c. II and III
  d. Only III

QUESTION 7

The practice by telephone companies of charging lower long-distance rates at night than during the day is an example of:
 a. inverted block pricing
  b. second-degree price discrimination
  c. peak-load pricing
  d. first-degree price discrimination
  e. none of the above