A monopolist will be able to earn positive pure economic profits regardless of the price elasticity ...

A monopolist will be able to earn positive pure economic profits regardless of the price elasticity of demand.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 2

Michael spends 10 a month on Pez dispensers and Superman action figures. His marginal-utility-to-price ratio for the Pez dispensers is 40, while his marginal-utility-to-price ratio for Superman action figures is 47 . Explain why Michael is not maximizing his utility and how can he change his behavior to increase his utility?

QUESTION 3

A monopolist always selects a price on the elastic portion of its demand curve.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 4

Use the idea of interpersonal comparisons of utility to argue for a progressive income tax system where people in higher income brackets are charged higher tax rates on their extra income.

QUESTION 5

Pure economic profit must be at a maximum for a monopolist who has a level of output in which total revenue is at a maximum.
 a. True
  b. False
  Indicate whether the statement is true or false