The price elasticity of supply tells us:
A. the percentage change in quantity supplied when the price of the good changes by one percent.
B. in which direction the quantity supplied changes as we move along the supply curve.
C. how quickly the supply will respond to a change in price.
D. the magnitude of shift in the supply curve in response to a change in price.
A. the percentage change in quantity supplied when the price of the good changes by one percent.
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Refer to Figure 11-12. The movement from isoquant T to isoquant U depicts
A) an increase in the cost of production. B) an increase in output. C) an increase in labor usage holding capital and output constant. D) a change in preferences with regards to input usage.
If the price rises and the total amount consumers spend on the good falls, then demand must be
A. perfectly inelastic. B. elastic. C. perfectly elastic. D. inelastic.
As the market price of a good rises, businesses will respond by producing more of that good because
A. marginal revenue exceeds marginal cost after the price increase. B. the rising price causes marginal cost to fall. C. laws and regulations require them to do so. D. marginal cost exceeds marginal revenue after the price increase.
Another description for capitalism is:
a. The socialist economy b. The market system c. The system of inputs and outputs d. The command system