A consumer chooses an optimal consumption point where the
a. marginal rate of substitution exceeds the relative price ratio.
b. slope of the indifference curve equals the slope of the budget constraint.
c. ratio of the prices equals one.
d. All of the above are correct.
b
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Using Figure 1 below, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:
A. P1 and Y2.
B. P3 and Y1.
C. P2 and Y3.
D. P2 and Y1.
At his current level of output, a monopolist has an MR of $10, an MC of $6, and an economic profit of zero. If the market demand curve is downward sloping and his marginal cost curve upward sloping, the monopolist
a. is producing his profit-maximizing level of output. b. could increase his profit by increasing his output. c. could increase his profit by increasing his price. d. should exit the market if he has positive fixed cost.
A market demand schedule for hamburgers would NOT include which of the following?
A. People who eat a cheeseburger every day for lunch B. The concept of ceteris paribus C. Vegetarians, who buy no hamburgers D. The labor market
The unit-elastic demand curve bends in the middle toward the origin of the graph and at either end moves closer to the axes.
Answer the following statement true (T) or false (F)