A constant-cost industry
A) is one in which an increase in demand is matched by a proportional increases in long-run supply.
B) generates increasing profits whenever demand increases because the new long-run equilibrium price is above the old price even though average costs have not changed.
C) has a horizontal long-run supply curve.
D) has a downward sloping long-run supply curve.
Answer: C
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Long-run aggregate supply will decrease for all of the following reasons EXCEPT
A) reduced money wages. B) decreased human capital. C) decrease in the level of full employment. D) decreased capital.
If an individual requires a bag full of cash to buy a pound of cake, then the currency is: a. not recognized as a medium of exchange. b. not performing well as a store of value. c. not performing as a unit of account
d. performing well as a commodity.
The same year that Derek Jeter, one-time shortstop for the New York Yankees, received an annual salary of $23.2 million, the president of the United States received an annual salary of $400,000. If the president of the United States actually contributed more to society than Derek Jeter, we can conclude that:
A. there is never a relationship between marginal revenue product and pay. B. the salary differences are based entirely on marginal revenue products. C. factors other than marginal revenue product probably explain the salary differences. D. the markets for their respective services are perfectly competitive.
A U.S. citizen's gift for famine relief in Somalia would be considered a:
A. capital inflow. B. capital outflow. C. current account transaction. D. service trade transaction.