Which of the following is true?
a. According to the law of supply, the higher the price of the good, the greater the quantity supplied
b. An individual supply curve is a graphical representation that shows the negative relationship between the price and the quantity an individual is willing and able to supply.
c. The market supply curve is the vertical summation of the individual firm supply curves.
d. An increase in supply is illustrated by an upward shift in the supply curve.
a
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Briefly explain why the law of one price does not hold closely for most products that are traded internationally.
What will be an ideal response?
Moral hazard is
A. The abuse of the welfare system by some nonneedy recipients. B. The involvement in illegal activity. C. An incentive to engage in undesirable behavior. D. The risk involved in accepting welfare.
The graph shows the market for rental housing in Little Rock. The market for apartments is efficient when
A) the quantity of apartments demanded is 12,000 a month. B) the rent ceiling is set at $300 a month. C) there is no rent ceiling. D) the quantity of apartments supplied is 6,000 a month. E) the rent charged is less than $450.