Define budget line
Budget line: Budget line exhibits all combinations of two goods which a consumer can purchase with his income at a specified price.
Elucidate the consequence of an increase in demand of a commodity on its equilibrium quantity and price? Answer: Increase in demand causes a rightward shift in the
The most complete monopoly by the given list would be: (1) McDonald’s dominance in marketing fast food burgers. (2) the Federal Reserve System [i.e., an arm of the government] issuing all US currency. (3) limiting subsidized low tuitions at stat
When cranberry farming is an increasing constant cost industry and that firm is typical, in that case an increase within the market demand for cranberries will give in a long run equilibrium price as: (i) less than P1. (ii) greater than P2.
Assume a neither firm possessing both the monopsony power as an employer and the market power in its output market, however which can neither wage discriminate nor price discriminate. In the equilibrium in its labor market for workers, of the given va
Rising the certainty and severity of punishment decreases cheating on an examination. This statement signifies: (i) Unrealistic expectations regarding student honesty. (ii) Purely normative visions of behavior. (iii) Misplaced cynicism since this issu
Features of Monopoly: A) A Single seller B) No close replacement available. C) No freedom for entry of new firms. D) Possibility of price discrimination.
What happens to equilibrium price if increase in demand is equivalent to increase in supply? Answer: In case of equivalent increase in demand and supply the equilib
Scrutiny of demand curves DD and D0D0 reveals such that: (1) D0D0 is relatively more elastic at a price of P1. (2) DD is relatively more elastic at a price of P2. (3) D0D0 probably reflects the demand f
When an oligopolistic firm increases its price, in that case the demand this faces will be: (1) more elastic if the other firms in the industry raise their prices. (2) less elastic when no other firms in the industry raise their prices. (3) more elast
Marginal rate of Substitution (MRS): It is the rate at which a consumer is prepared to give up one good to get the other good.
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