The figure above shows Ronald's budget line. He has a weekly income of $20, which he spends on hotdogs and hamburgers. Now Ronald's income decreases to $10 per week and the price of a hotdog doubles
Ronald's budget line becomes ________ and ________. A) flatter; shifts rightward
B) flatter; does not shift
C) steeper; shifts rightward
D) steeper; shifts leftward
D
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If consumption were a direct function of disposable income, how would a decrease in personal taxes or an increase in transfer payments affect consumption?
In a perfectly competitive labor market,
a. some workers may be prevented from leaving the labor market b. workers compete for employment opportunities c. workers usually receive wages that are greater than their marginal revenue product d. firms view all workers as being identical e. there are relatively few sellers of labor services
Marginal cost curves and average cost curves are both purely upward sloping
a. True b. False Indicate whether the statement is true or false
What is true for monopoly that is not true for perfect competition?
a. The industry demand curve is downward sloping. b. Profit is maximized where MR = MC. c. The firm and the industry are exactly the same entity. d. Positive economic profits may be earned in the short run.