Would a profit-maximizing firm sell where demand is inelastic?
A. No, this would not follow the rule of MC = MR.
B. No, the firm could not profitably raise price.
C. Yes, the firm could profitably lower price to attract sales.
D. Yes, in this case there are few substitutes for the good.
Answer: A
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In the loanable funds market, an increase in wealth shifts the ________ loanable funds curve ________
A) supply of; rightward B) supply of; leftward C) demand for; rightward D) demand for; leftward
Instead of throwing away a worn-out pair of jeans, a cowboy trades them in for $12 . The jeans are resold for $45 to someone who likes to project a rugged image. These transactions are Pareto improvements
a. True b. False
Use the above figure. The total revenue earned by this monopolistically competitive firm is
A. $480. B. $2,560. C. $1,600. D. $1,900.
Related to the Economics in Practice on page 316: From a consumer welfare standpoint, as the variety of available choices of a particular type of product increases, consumer welfare
A. increases at a proportional rate. B. decreases at a proportional rate. C. tends to remain very constant. D. increases to a point, but eventually may lose value with too much variety.