The above figure shows the demand and cost curves for a firm in monopolistic competition in the long run. The firm maximizes its profit by

Ronald Coase was awarded the 1991 Nobel Prize in Economics primarily for addressing problems related to externalities. Which of the following describes Coase's work?

A) Coase argued that government intervention is necessary to achieve economic efficiency in markets that are affected by externalities. B) Coase proved that a competitive market achieved a greater degree of economic efficiency than a non-competitive market when externalities occur. C) Coase proved that economic efficiency cannot be achieved in a market that is affected by positive or negative externalities. D) Coase argued that under some circumstances private solutions to the problems of externalities will occur.

Max has allocated $100 toward meats for his barbecue. His budget line and an indifference map are shown in the above figure. What happens if Max's mother gives him 10 pounds of burger?

A) Max would have preferred receiving the dollar value of the burger. B) Max is indifferent between this gift and the dollar value of the burger. C) Max prefers this gift to the dollar value of the burger. D) None of the above.