Author Question: Ellis, a staunch environmentalist, is hired right of graduate school by the Environmental Protection ... (Read 64 times)

CQXA

  • Hero Member
  • *****
  • Posts: 546
Ellis, a staunch environmentalist, is hired right of graduate school by the Environmental Protection Agency. He is ecstatic about having the opportunity to promote what he believes to be the public interest.
 
  Within a few years he gets promoted to manager of his bureau. Shortly after his promotion he successfully argues for a 30 percent increase in his department's budget. How might Ellis benefit personally from an increased budget? Now suppose that it was known to be true that the best thing for the environment was for a large portion of Ellis' budget to be shifted to another department. Why might Ellis fight this change? Why might he not?

Question 2

At the current price of a good, Al's consumer surplus equals 8, and Ben's consumer surplus equals 15. By using two-part pricing, a monopolist could increase his profit by
 
  A) 8.
  B) 16.
  C) 15.
  D) 30.



firehawk60

  • Sr. Member
  • ****
  • Posts: 315
Answer to Question 1

Ellis would benefit from an increased budget in a variety of ways. First he would enjoy increased power and prestige from having more resources at his disposal. Second, he is likely to receive a higher income as there is a strong tendency for a bureaucrat's income and budget size to be positively correlated. Third, a budget increase is likely to mean a nicer working environment. Ellis might fight the change if the utility he loses from a large portion of his budget being transferred to another department is greater than the utility he gains from knowing the environment has been helped. If the gain in utility is greater than the loss in utility, he will not fight the transfer.

Answer to Question 2

B



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question


 

Did you know?

You should not take more than 1,000 mg of vitamin E per day. Doses above this amount increase the risk of bleeding problems that can lead to a stroke.

Did you know?

Opium has influenced much of the world's most popular literature. The following authors were all opium users, of varying degrees: Lewis Carroll, Charles, Dickens, Arthur Conan Doyle, and Oscar Wilde.

Did you know?

A strange skin disease referred to as Morgellons has occurred in the southern United States and in California. Symptoms include slowly healing sores, joint pain, persistent fatigue, and a sensation of things crawling through the skin. Another symptom is strange-looking, threadlike extrusions coming out of the skin.

Did you know?

Many of the drugs used by neuroscientists are derived from toxic plants and venomous animals (such as snakes, spiders, snails, and puffer fish).

Did you know?

Immunoglobulin injections may give short-term protection against, or reduce severity of certain diseases. They help people who have an inherited problem making their own antibodies, or those who are having certain types of cancer treatments.

For a complete list of videos, visit our video library