How is the market supply curve found? In what ways is the process similar to the way the market demand curve is determined? In what ways are they different?
What will be an ideal response?
The market supply curve is obtained by horizontally adding individual supply curves. The quantity supplied by each firm for a given price is added up to get the quantity supplied by the market. The process is identical to that for finding the market demand curve. The only difference is that the market demand curve slopes down and the market supply curve slopes up.
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Which of the following statements is correct about the concept of willingness to pay?
A) The willingness to pay is the lowest price that a buyer is willing to pay for an extra unit of a commodity. B) The willingness to pay for a commodity increases exponentially as the consumption of the commodity increases. C) The willingness to pay for a commodity increases linearly as the consumption of the commodity increases. D) If a consumer is consuming 10 units of a commodity and he is ready to pay $2 for the eleventh unit, his willingness to pay for the eleventh unit is $2.
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.
Which of the following would be counted as investment in the national income accounts?
a. the purchase of a newly issued stock b. the purchase of a newly built apartment house c. the purchase of a newly minted coin d. the payment of tuition at a private college
The public debt is the sum of all previous:
A. budget deficits of the federal government. B. expenditures of the federal government. C. budget deficits minus any budget surpluses of the federal government. D. budget surpluses minus the current budget deficit of the federal government.