Refer to the information provided in Figure 12.4 below to answer the question(s) that follow.
Figure 12.4There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of S0 and D0.Refer to Figure 12.4. Assume consumer preference changes toward X and away from Y. Ceteris paribus, the likely change in capital flow in sector X will cause the industry's short-run ________ curve to shift to the ________.
A. supply; right
B. demand; left
C. supply; left
D. demand; right
Answer: A
You might also like to view...
The price elasticity of supply of a good measures how much a change in price of the good will change its quantity supplied
a. True b. False Indicate whether the statement is true or false
A year-long drought that destroys most of the summer's crops would be considered a:
A. short-run supply shock. B. long-run demand shock. C. long-run supply shock. D. short-run demand shock.
A competitive firm operating in the short run is producing at the output level at which ATC is at a minimum. If ATC = $8 and MR = $9, in order to maximize profits (or minimize losses), this firm should:
a. reduce output. b. increase output. Correct c. shut down. d. do nothing; the firm is already maximizing profits.
Explain why featherbedding may or may not increase the demand for labor.
What will be an ideal response?