If the legislature has a line-item veto on a bureau's budget, the bureau
a. can no longer present its entire budget as a package deal for provision of services
b. will have more power than if the legislature used an overall budget ceiling
c. will be able to supply its output to the legislature as a monopolist
d. will try to discourage budget cuts by threatening to make cuts that will cause the legislature the least political trouble
e. will be free to pursue its own overall objectives
A
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Which of the following is necessary for a monopolist to price discriminate between groups?
A) The groups are identifiable. B) The groups have different willingness to pay. C) A customer from one group cannot resell to a customer in another group. D) All of the above conditions are necessary for the monopolist to price discriminate.
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