1. If the demand for widgets is inelastic, then when the price of widgets increases, revenues will:...
Question:
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1. If the demand for widgets is inelastic, then when the price of widgets increases, revenues will:
a. decrease
b. remain the same
c. increase
d. increase, unless there are substitutes for widgets
e. decrease because of the law of demand holds for widgets
2. Which of the following shifts the supply curve leftward?
a. An improvement in technology that decreases the cost of production.
b. An increase in the number of suppliers.
c. An anticipated drought that will make inputs more expensive.
d. A decrease in the wage rate.
3. Diminishing marginal rate of substitution necessarily implies that the marginal rate of
substitution
a. falls as one travels down (eastward) along an indifference curve.
b. falls as one travels up (westward) along an indifference curve.
c. stays the same as one travels up (westward) along an indifference curve.
d. decreases as the quantities of both goods increase.
e. we get less utility when we have higher incomes
4. Perfect complements will have indifference curves that are
a. concave to the origin.
b. vertical.
c. straight lines.
d. L-shaped.
e. horizontal.
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