The quantity supplied of corn is the number of bushels that corn farmers want to sell under the current market conditions, while the supply of corn is a set of price-quantity pairs showing the amounts that farmers wish to sell at various hypothetical prices. According to the law of supply, a rise in the price of corn will cause a rise in the quantity supplied of corn. Non-price factors that positively affect corn growers (such as improved weather conditions, better agricultural technology, and lower costs of fertilizer, seed, labor, and other inputs) would cause a rise in the supply of corn. A rise in quantity supplied is shown by moving up and to the right along the supply curve, and a rise in supply is shown by shifting the supply curve down and to the right.
What will be an ideal response?
When there is a surplus, the market price must be higher than the equilibrium price. Demanders will be satisfied in this situation, but suppliers will not. Competition among suppliers will cause the market price to be bid down until it reaches the equilibrium price.
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When the European System of Central Banks uses main refinancing operations, it is similar to the Federal Reserve using
A) dynamic open market operations. B) defensive open market operations. C) discount policy. D) reserve requirements.
According to the traditional classical school of thought, aggregate supply is vertical both in the short run and in the long run
a. True b. False Indicate whether the statement is true or false
Draw a production function and illustrate the effects of capital investment and technological improvement on labor productivity.
What will be an ideal response?
Suppose that each worker must use only one shovel to dig a trench, and shovels are useless by themselves. In the long run, an increase in the price of shovels will result in
A) fewer shovels being purchased to produce the same number of trenches. B) more workers being hired to produce the same number of trenches. C) the firm wishing to produce more trenches. D) no change in the firm's input mix.