Suppose two goods coffee and creamer provide the consumer with utility but only if they are consumed in fixed proportions. An increase in the price of coffee will yield
a. a substitution effect and an income effect in opposite directions.
b. a substitution effect and an income effect in the same direction.
c. a substitution effect but no income effect.
d. an income effect but no substitution effect.
d
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In the case of pure monopoly:
a. one firm is the sole producer of a good or service which has no close substitutes b. the firm's profit is maximized at the price and output combination where marginal cost equals marginal revenue c. the demand curve is always elastic d. a and b only e. a, b, and c
How are the monopolistically competitive producer and the monopolist different?
a. The monopolist has zero barriers to entry and exit, but the monopolistically competitive producer has many such barriers. b. The monopolist has an upward-sloping demand curve, but the monopolistically competitive producer has a horizontal demand curve. c. The monopolist can make economic profits in the long run, but the monopolistically competitive producer cannot. d. The monopolist has many competitors, but the monopolistically competitive producer does not.