Ch11 - CHAPTER 11 Pricing with Market Power MULTIPLE CHOICE...

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CHAPTER 11 Pricing with Market Power MULTIPLE CHOICE Section 11.1 easy 1. Which of the following strategies are used by business firms to capture consumer surplus? a. price discrimination. b. bundling. c. two-part tariffs. d. all of the above. easy 2. Rather than charging a single price to all customers, a firm charges a higher price to men and a lower price to women. By engaging in this practice, the firm: a. is trying to reduce its costs and therefore increase its profit. b. is engaging in an illegal activity that is prohibited by the Sherman Antitrust Act. c. is attempting to convert producer surplus into consumer surplus. d. is attempting to convert consumer surplus into producer surplus. e. both (a) and (c) are correct. Section 11.2 easy 3. An electric power company uses block pricing for electricity sales. Block pricing is an example of a. first-degree price discrimination. b. second-degree price discrimination . c. third-degree price discrimination. d. Block pricing is not a type of price discrimination. easy 4. When a firm charges each customer the maximum price that the customer is willing to pay, the firm a. engages in a discrete pricing strategy. b. charges the average reservation price. c. engages in second-degree price discrimination. d. engages in first-degree price discrimination. easy 5. The maximum price that a consumer is willing to pay for each unit bought is the ______________ price. a. market b. reservation c. consumer surplus d. auction e. choke easy 6. Second-degree price discrimination is the practice of charging a. the reservation price to each customer. b. different prices for different blocks of the same good or service. c. different groups of customers different prices for the same products. d. each customer the maximum price that he or she is willing to pay. 143
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CHAPTER 11 TEST BANK PRICING WITH MARKET POWER SIXTH EDITION easy 7. A firm is charging a different price for each unit purchased by a consumer. This is called a. first-degree price discrimination. b. second-degree price discrimination. c. third-degree price discrimination. d. fourth-degree price discrimination. e. fifth-degree price discrimination. easy 8. A tennis pro charges $15 per hour for tennis lessons for children and $30 per hour for tennis lessons for adults. The tennis pro is practicing a. first-degree price discrimination. b. second-degree price discrimination. c. third-degree price discrimination. d. fourth-degree price discrimination. e. fifth-degree price discrimination. easy 9. Discrimination based upon the quantity consumed is referred to as ______________ price discrimination. a. first-degree b. second degree c. third-degree d. group easy 10. A doctor sizes up patients' income and charges wealthy patients more than poorer ones. This pricing scheme represents a form of a. first-degree price discrimination. b.
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This note was uploaded on 08/07/2011 for the course ECON 105 taught by Professor Prof.eco during the Spring '11 term at Indian School of Business.

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Ch11 - CHAPTER 11 Pricing with Market Power MULTIPLE CHOICE...

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