If prices and income in a two-good society double, what will happen to the budget line?
A) The intercepts of the budget line will increase.
B) The intercepts of the budget line will decrease.
C) The slope of the budget line may either increase or decrease.
D) Insufficient information is given to determine what effect the change will have on the budget line but we know society is worse-off.
E) There will be no effect on the budget line.
E
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Which of the following is NOT correct about a single-price monopoly?
A) Maximum profit is found where demand is the most inelastic. B) Marginal revenue is negative when demand is inelastic. C) Marginal revenue is positive when demand is elastic. D) To sell more output, the firm must lower its price. E) To maximize its profit, the firm produces so that marginal revenue equals marginal cost.
The above figure shows the demand and cost curves for a firm in monopolistic competition. In the figure, the firm makes an economic profit of
A) $0. B) $20. C) $40. D) $120.