Answer the following statements true (T) or false (F)
1. A parallel shift in a budget line is caused by changes in a consumer's level of satisfaction.
2. A change in the relative prices for two goods can be shown as a parallel shift in a consumer's budget line.
3. Indifference curves are convex to the origin due to diminishing marginal rates of substitution.
4. Indifference curves and budget lines can be used to derive an individual's demand curve for a product.
1. FALSE
2. FALSE
3. TRUE
4. TRUE
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Once a monopoly has determined how much it produces, it will charge a price that
A) is determined by the intersection of the marginal cost and average total cost curves. B) minimizes marginal cost. C) is determined by its demand curve. D) is independent of the amount produced. E) is equal to its average total cost.
The opportunity cost doctrine suggests that which of the following are not costs of government educational programs? a. The wages of teachers
b. The foregone earnings of participants. c. Stipends paid to participants. d. Materials used by students.