A fall in the price of milk, used in the production of ice cream, will:
A. Decrease the supply of ice cream
B. Increase the supply of ice cream
C. Cause a movement along the supply curve of ice cream
D. Have no effect on the supply of ice cream
Answer: B
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According to the production function, as the quantity of labor employed increases, real GDP increases
A) at an increasing rate. B) at a decreasing rate. C) at a constant rate. D) and then eventually decreases. E) until it reaches potential GDP, and then it no longer changes.
An industry has 1000 competitive firms, each producing 50 tons of output. At the current market price of $10, half of the firms have a short-run supply curve with a slope of 1; the other half each have a short-run supply curve with slope 2
The short-run elasticity of market supply is A) 1/50 B) 3/10 C) 1/5 D) 2/5 E) none of the above
The graph shown best represents:
A. a binding price ceiling.
B. a binding price floor.
C. a missing market.
D. a market for an inferior good.
Trade occurs when a country has an absolute advantage and not just a comparative advantage over another country
a. True b. False Indicate whether the statement is true or false