Long-run market supply curves are upward sloping if
A) firms are identical.
B) the number of firms is restricted in the long run.
C) input prices fall as the industry expands.
D) All of the above.
B
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Your friend notices that U.S. auto production and U.S. population growth have moved together over several decades. He reasons that one way to slow population growth is for the government to order the auto makers to cut back on production. You gently point out to him that he
a. is correct only when the economy is in a recession b. has mistakenly inferred causation from observed correlation c. has ignored secondary effects d. has committed the fallacy of composition e. is correct only when the United States enjoys economic growth
Holding all other factors constant and using the midpoint method, if a tractor manufacturer increases production from 80 to 100 units when price increases by 15 percent, then supply is
a. inelastic, since the price elasticity of supply is equal to 0.68. b. inelastic, since the price elasticity of supply is equal to 1.48. c. elastic, since the price elasticity of supply is equal to 0.68. d. elastic, since the price elasticity of supply is equal to 1.48.
A set of indifference curves that are only slightly bowed inward represent goods that could best be described as
a. perfect substitutes. b. perfect complements. c. very close substitutes. d. very close complements.
In economic terminology, the accumulated training and education that workers receive that increases their productivity is referred to as
A) entrepreneurship. B) human capital. C) labor. D) physical capital.