Here are three possible definitions of Compensating Variation: I. ...

[nummyann]

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 2

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

[fdliggud]

Answer to Question 1

b

Answer to Question 2

c

[nummyann]

Excellent

[tkempin]

TYSM