Vacation tours to Europe invariably package visits to disparate ...

[cabate]

Vacation tours to Europe invariably package visits to disparate regions: cities, mountains, and the seaside. Bundling, a type of second degree price discrimination, is most profitable when:
 a. the preference rankings of vacationers travelling together are negatively correlated.
  b. a preference for cities is always higher than preferences for mountain vistas.
  c. preference rankings of vacationers travelling together are positively correlated.
  d. preference for the seaside is always higher than preferences for city excursions.
  e. no one wants to take a European vacation package to cities, mountains, and the seaside.

Question 2

Adverse selection in insurance requires that
 a. potential customers face different levels risk
  b. potential customers facing more risk are no more interested in purchasing insurance
  c. people are not risk averse
  d. insurers can tell higher risk people from lower risk people

[alexanderhamilton]

Answer to Question 1

a

Answer to Question 2

a

[cabate]

Thank you

[alexanderhamilton]

Happy to help you