Explain how the market supply curve is derived. Does the law of supply apply to the market supply curve?
What will be an ideal response?
The market supply curve for a good can be found by summing the quantities supplied by all of the firms selling in the market for that good. Since all firms' supply curves are upward sloping (due to the law of supply), the market supply curve will also be upward sloping. Therefore, the law of supply does apply to the market supply curve as well.
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As long as technology increases, economic growth is free
Indicate whether the statement is true or false
Dustin's copy shop can use four alternative plants. The figure above shows the average total cost curves for Plant 1 (ATC1), Plant 2 (ATC2), Plant 3 (ATC3), and Plant 4 (ATC4). Dustin's minimum efficient scale is
A) 2,650 copies per day. B) 6,000 copies per day. C) 4,000 copies per day. D) More information is needed to determine the minimum efficient scale.
Explain why the tax multiplier is different from the government purchases multiplier, in both sign and relative magnitude
What will be an ideal response?
The major difference between absolute purchasing power parity (APPP) and relative purchasing power parity (RPPP) is:
a. APPP deals the equilibrium exchange rate for a basket of goods, and RPPP deals with changes in equilibrium exchange rate for a basket of goods. b. APPP deals with changes in nominal exchange rates for a basket of goods, and RPPP deals with changes of exchange rates for a particular good. c. APPP deals with the equilibrium exchange rate for one good, and RPPP deals with the equilibrium exchange rate for a basket of goods. d. APPP deals with changes in nominal exchange rates for a basket of goods, and RPPP deals with levels of exchange rates for a particular good. e. None of the above.