1. The individual demand curve slopes downward because
a) The value an individual places on an extra unit of the good decreases.
b) The amount an individual is willing to pay for the additional unit increases.
c) The total value consumers derive from consuming a product increases when they consume more units.
d) All of the above.

2. The strategy underlying price discrimination is
a) To charge higher prices to customers who have good substitutes available to them.
b) To charge everyone the same price, but limit the quantity they are allowed to buy.
c) To increase total revenue by charging higher prices to those with the most inelastic demand for the product and lower prices to those with the most elastic demand.
d) To reduce per-unit cost by charging higher prices to those with the most inelastic demand and lower prices to those with the most elastic demand.

3. Direct segment discrimination may be based on
a) The age groups of buyers
b) The location of buyers
c) A buyer’s membership in certain clubs or associations
d) All of the above

4. What key difference distinguishes an indirect from a direct price discrimination scheme?
a) The seller doesn’t have market power.
b) The seller has no means to identify different customer groups with different demand elasticities.
c) The seller cannot prevent arbitrage between the two groups.
d) None of the above.

5. Bundling different items together helps sellers extract more consumer surplus by
a) Smoothing out different preferences in different buyer groups.
b) Grouping buyers into more heterogeneous segments.
c) Implementing a direct price discrimination scheme.
d) None of the above.