If a monopolist were to produce in the inelastic segment of its demand curve:
A. total revenue would be at a maximum.
B. marginal revenue would be positive.
C. the firm would not be maximizing profits.
D. it would necessarily incur a loss.
Answer: C
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Suppose the short-run price elasticity of demand for airline travel is 0.50, while its long- run elasticity is 2.50 . This means that for 100 short-notice travelers compared to 100 travelers who book well in advance, a significant increase in airline fares now will cause airlines to
a. collect less revenue from the short-notice travelers than from the travelers who book well in advance b. gain travelers who book well in advance but lose short-notice travelers c. lose more revenue from short-notice travelers than from travelers who book well in advance d. collect less revenue from the travelers who book well in advance than from the short-notice travelers e. lose more short-notice travelers than travelers who book well in advance
Which of the following statements is true regarding Temporary Assistance to Needy Families (TANF)?
a. States set the level of welfare benefits they will provide to the poor, and the federal government guarantees some support. b. Since TANF began, the number of needy families receiving benefits has almost doubled. c. Federal dollars are fixed for each state, which may use the money for any antipoverty programs as long as there is a work requirement. d. The federal government’s welfare spending rises and falls depending on how each state sets its welfare contributions.