Refer to the above figure. Which of the following statements is TRUE?
A. Panel A shows a change in quantity supplied and Panel B shows a change in supply.
B. Panel A shows a change in supply and Panel B shows a change in quantity supplied.
C. Panel A shows an increase in supply and Panel B shows a decrease in supply.
D. Both Panels A and B show an increase in supply.
Answer: A
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Elite Astin-Martin Cars offers its customers a fancy showroom and a knowledgeable sales force. If Astin-Martins Are Us opens an outlet nearby, offering cut rate prices and little service, then Elite Astin-Martin Cars will likely find
a. more customers attracted to buying Astin-Martins and its sales will increase. b. more customers visiting its showroom, but lower sales. c. fewer customers visiting its showroom and lower sales. d. fewer customers visiting its showroom but more of them making a purchase.
Suppose a firm uses labor and capital to produce output. The last unit of labor hired has a marginal product of 12 units of output, and the last unit of capital employed has a marginal product of 20 units
Use the optimal combination of inputs rule to calculate the price of capital if the price of labor is $6 per unit. The price of capital is A) $2. B) $10. C) $20. D) impossible to determine with the information given.
Over the past year, productivity grew 1%, capital grew 2%, and labor grew 2%. If the elasticities of output with respect to capital and labor are 0.3 and 0.7, respectively, how much did output grow?
A) 1% B) 2% C) 3% D) 4%
It has been said that well-educated citizens are necessary for democracy. Discuss this idea in economic terms. What market imperfection might occur and what are the appropriate government policies to correct it?