E1)Assuming uniform pricing, returning a monopolist's profits back to consumers...

a)...eliminates the deadweight loss of monopoly

b)...fails to eliminate the deadweight loss of monopoly

E2)In a monopoly market, total social surplus is (weakly) higher under perfect price discrimination than under uniform pricing.

a)True

b)False

E3)Consumers (as a group) would prefer a monopolist to perfectly price discriminate rather than to charge a uniform price, because total social surplus is higher under perfect price discrimination.

a)True

b)False

E4)For a given demand curve, an inward (leftward) shift in the supply curve will ______ lead to a strict decrease in consumer surplus.

a)Always

b)sometimes

c)Never

E5)Lydia owns a railroad company in Belgium and acts as a monopolist. Each train has two types of seats on its trains: business class and economy class. All of the customers prefer business class seats to economy class seats; however, price-sensitive people choose to buy the economy seats. Lydia is able to buy seat cushions that she could install in economy class that would increase the economy class consumers' willingness to pay for economy class by more than the cost of installing the cushions.

What will happen to Lydia's profits when she installs the cushions?

a)Lydia will increase her profits by installing the cushions

b)Lydia will decrease her profits by installing the cushions

c)Lydia's profits will be unchanged by installing the cushions

d)The answer is ambiguous