Author Question: If a government policy change harms a monopolist, the government could A) tax those who get ... (Read 74 times)

bobbie · **on:** Jul 1, 2018

If a government policy change harms a monopolist, the government could

A) tax those who get additional gains and compensate the monopolist, thereby making the change a Pareto improvement.
B) increase the general tax rate and compensate the monopolist, thereby making the change a Pareto improvement.
C) do nothing, because the change is a Pareto improvement.
D) It is not possible to mitigate the harm to a monopolist.

Question 2

When Trina can afford bundles A and B but not C, she purchases bundle A. When Trina can afford bundles A and C, but not B, she purchases bundle C.

We can conclude her preference ordering of the three bundles is (in order from most preferred to least) A) C, A, B.
B) B, A, C.
C) A, C, B.
D) A, B, C.