The long run is defined as the time period in which
A) the firm can vary only one input.
B) the firm can make positive economic profits.
C) all factors of production can be altered.
D) the firm can alter its rate of production.
Answer: C
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The amount of time it takes Congress to debate the size of a tax cut is known as the
A) recognition time lag. B) action time lag. C) effect time lag. D) Ricardian-equivalence time lag.
Relative to the case in which two identical firms choose quantities simultaneously in a Cournot model, if one of the two moves first and is observed by the other, how would this affect its output?
a. it would increase its output, more so if it could deter the other from entering the market at all. b. it would increase its output, but would moderate this increase if it were concerned about entry deterrence. c. it would decrease its output if it couldn't deter entry and increase it otherwise. d. it would decrease its output whether or not it wanted to deter entry.
The reason for the different in tax policy and spending policy by the government is due to:
A. people not responding to tax policy as much as spending policy. B. the fact that when the government engages in spending policy, they do it more aggressively. C. firms drastically responding to tax changes that are implemented. D. the difference in initial spending that results from engaging in tax policy.
The short-run aggregate supply curve:
A. Becomes flatter at output levels above the full-employment output B. Becomes steep at output levels above the full-employment output C. Is upward-sloping with a constant slope D. Is horizontal