There is a compensated demand (or MWTP) curve for every indifference curve just as there is an uncompensated demand curve for every income level.
Answer the following statement true (T) or false (F)
True
Rationale: Compensated demand curves hold utility constant -- as utility (and thus the indifference curve) changes, there is a new compensated demand curve. The same holds for uncompensated demand curves and income.
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Suppose Campus Books, a profit-maximizing firm, is the only supplier of the textbook for a given class. The marginal cost of supplying each book is constant and equal to $10, and Campus Books has no fixed costs. The table below shows the reservation prices of the eight students enrolled in the class.StudentReservation Price($/Book)Q60R54S48T42U36V30W24X18 How many books will Campus Books sell if it must charge a single price to all of its customers?
A. 5 B. 7 C. 3 D. 4
The amount of a tax paid by the sellers will be larger the more ________ the demand and the more ________ the supply
A) elastic; inelastic B) inelastic; elastic C) inelastic; inelastic D) elastic; elastic
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) it can make decisions regarding price and output without violating antitrust laws. D) there is no other firm selling a substitute for its product close enough that its economic profits are competed away in the long run.
Savers in the financial system make decisions about how to save their money by following the basic principles of:
A. cost benefit analysis. B. asset valuation. C. risk valuation. D. rate of return on investments.