When a monopolistically competitive firm cuts its price to increase its sales, it experiences a loss in revenue due to the income effect and a gain in revenue due to the substitution effect
Indicate whether the statement is true or false
FALSE
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If the supply curve is ________, the elasticity of supply is ________
A) vertical; infinite B) vertical; 0 C) horizontal; 1 D) horizontal; 0 E) a straight, upward sloping line through the origin; 0
Suppose the market clearing price for apples falls from $3.00 to $2.00 per pound, and the overall market clearing output increases from 1 million to 2 million pounds. How can we explain the fall in price and increase in market output?
A) Supply decreased and demand remained unchanged. B) Supply remained unchanged and demand decreased. C) Demand increased and supply remained unchanged. D) Demand remained unchanged and supply increased.
A subgame-perfect equilibrium is a Nash equilibrium in which no player can make himself better off by changing his decision at any decision node
Indicate whether the statement is true or false
Government spending plays no role in meeting our social and public needs
a. True b. False Indicate whether the statement is true or false