How will an increase in income affect the budget line for two goods, all other things equal?
Please provide the best answer for the statement.
A budget line is defined by the intercepts for the two goods in a two-quadrant graph. These intercept values are calculated by dividing money income by the price of the product. If money income increases and prices stay the same, then the intercept values will increase and the budget line will shift outward from the origin.
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If demand is inelastic, an increase in the price will
A) decrease total revenue. B) increase total revenue. C) not change total revenue. D) increase the quantity demanded.
Using a broad definition, a firm would have a monopoly if
A) it produced a product that has no close substitutes. B) it does not have to collude with any other producer to earn an economic profit. C) there is no other firm selling a substitute for its product close enough that its economic profits are competed away in the long run. D) it can make decisions regarding price and output without violating antitrust laws.