A firm has two customers with non-identical demands and a constant marginal cost of production. At any positive price, the consumer surplus values for the two customers are related as CS2 ? CS1
What can we say about the optimal two-part tariff for the firm? A) The firm sets the price equal to MC and the optimal tariff is equal to CS2.
B) The firm sets the price equal to MC and the optimal tariff is equal to CS1.
C) The firm sets the price equal to MC and the optimal tariff is equal to zero.
D) The optimal price is greater than MC and the optimal tariff is equal to CS1.
D
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The Monetarist model expands the Keynesian model by proposing that
A) decreases in the quantity of money lead to higher interest rates. B) the government should lower taxes promote economic growth. C) decreases in tax rates generate higher consumption. D) decreases in the growth rate of the quantity of money trigger expansions by controlling inflation. E) markets should be left alone to determine the optimal outcome.
A good or service or a resource is excludable if
A) it is possible to prevent someone from enjoying its benefits. B) it is not possible to prevent someone from enjoying its benefits. C) its use by one person decreases the quantity available for someone else. D) its use by one person does not decrease the quantity available for someone else.