Suppose the short-run supply curve is a straight line of slope +1 that intersects the origin. The long-run supply curve will be
A. shallower.
B. steeper.
C. horizontal.
D. vertical.
Answer: A
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Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting downward C. Aggregate demand shifting rightward D. Aggregate demand shifting leftward
The lack of a universal productivity effect of higher education was demonstrated by the experience of
a. the United Kingdom. b. Ireland. c. France. d. the Soviet Union.
Lars is CEO of a large monopolistic firm. He looks at what is going on with revenues and pricing, and being knowledgeable about running a monopoly, he decides to reduce production. What does this tell us about his firm?
a. Marginal cost is equal to marginal revenue. b. Marginal revenue is exceeding marginal cost. c. Marginal cost is exceeding marginal revenue. d. Marginal revenue is equal to price.
Which of the following checks issued by the government represents a transfer payment?
A) The federal government pays a defense contractor for development of a missile system. B) The federal government pays a retiree her Social Security benefits. C) The state of Oregon pays a construction firm for its work in repairing a state highway. D) The state of Illinois pays groundskeepers at the state capitol building their weekly wages.