In a small, agricultural nation, consumers buy only steak and potatoes. In 2009, the base year, the typical consumer spent $potatoes on strawberries and $100 on steak. The price of potatoes is $1 and the price of steak is $2 in 2009

Which of the following statements is true about marginal revenue?

A) If marginal revenue is zero, it means that quantity demanded falls to zero when a firm changes its price. B) Marginal revenue increases as price falls and quantity sold increases. C) If marginal revenue is negative, the additional revenue received from selling 1 more unit of the good is smaller than the revenue lost from receiving a lower price on all the units that could have been sold at the original price. D) If marginal revenue is positive, the additional revenue received from selling 1 more unit of the good is smaller than the revenue lost from receiving a lower price on all the units that could have been sold at the original price.

Which of the following would cause a shift in the supply curve to the left?

(a) An increase in consumer income. (b) New technology resulting in the cost of production falling. (c) An increase in the number of suppliers in the industry. (d) None of the above.