In the basic 45-degree line model, what is the effect of a decrease in the price level?
a. The expenditure line will shift downward.
b. The expenditure line will shift upward.
c. There will be movement to the left on the expenditure line.
d. There will be movement to the right on the expenditure line.
b
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The flatter the demand curve that passes through a given point, the more inelastic the demand
a. True b. False Indicate whether the statement is true or false
Suppose the utility function for a firm manager is U = ? + bQ, where Q is output, ? is profit, and b is a positive constant. How would the firm's output compare with what it would be if the manager's objective was to maximize profit?
A. It would be less than the profit-maximizing output. B. It would be greater than the profit-maximizing output. C. It would be the same as the profit-maximizing output. D. None of the statements is correct.