The longer the time period considered, the elasticity of supply tends to:
a. decrease
b. remain constant.
c. increase.
d. converge to zero.
c
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If both firms plan to be in business for 5 years, then the Nash Equilibrium will be
a. For each firm charge a LP every year b. For neither firm to charge a LP in early years, but to charge a HP in later years. c. For each firm to charge a HP every year d. For neither firm to charge a HP in early years, but to charge a LP in later years.
If the fraction of U.S. government securities held by foreigners increases, _____
a. current consumption by U.S. citizens can decrease b. current consumption by U.S. citizens can increase c. current interest payments will increase d. private investments will increase e. the burden of debt on future generations will decrease
If two commodities are substitutes, then
a. they tend to be used together by consumers b. their prices are generally regulated by the government c. an increase in the price of one of them increases the supply of the other d. the cross-price elasticity of demand is positive e. the cross-price elasticity of demand is negative
A consumer consumes two normal goods, coffee and chocolate. The price of coffee rises. The income effect, by itself, suggests that the consumer will consume
a. more coffee and more chocolate. b. less coffee and less chocolate. c. more coffee and less chocolate. d. less coffee and more chocolate.