Explain the relationship between elasticity of supply and time
What will be an ideal response?
Time is the key factor in determining whether the supply of a good will be elastic or inelastic.
You might also like to view...
Robert and Janet are discussing unemployment and inflation in their country. Robert, on the basis of a recent newspaper report, claims that a 5% reduction in unemployment will lead to a 2% rise in inflation
On the other hand, Janet insists that inflation is a far bigger problem than unemployment and should be addressed with prime importance. Classify Robert's and Janet's statements as descriptive or advisory. Explain your answer.
With respect to labor supply, the substitution effect means a
A) person increases his or her hours of labor in response to a higher wage rate. B) person decreases his or her hours of labor in response to a higher wage rate. C) person substitutes high paying work for low paying work. D) firm substitutes capital for labor.
Which of the following solutions to recessions came from the short-run macro model?
a. A non-interventionist wait and see solution b. Increasing taxes c. Decreasing the federal deficit to jump-start the economy d. Increasing government spending to jump-start the economy e. None of the above
Refer to the graph above. Assume that D1 and S1 are the initial demand for and supply of dollars. Suppose that Britain's demand for dollars increases from D1 to D2. If the British government wishes to fix the exchange rate at the initial level, then it would be faced with a problem of:
The graph below shows the supply and demand curves for dollars in the pound/dollar market.
A. Deteriorating terms of trade
B. Rationing LM dollars among British importers who would like to acquire LN dollars
C. A rise in the pound price of dollars
D. Rationing LN dollars among British importers who would like to acquire LM dollars