Which of the following statements is true?
A) The supply of oil is perfectly inelastic; therefore, as the demand for oil increases over time the price of oil increases significantly.
B) The supply of oil is very inelastic over short time periods but becomes more elastic over time. A given shift in supply results in a smaller increase in the price of oil when the supply is more elastic.
C) Over short periods of time increases in the demand for oil are greater than increases in the supply of oil. Over the long run increases in the demand and the supply of oil are about equal. As a result, the price of oil increases greatly in the short run but is stable in the long run.
D) The supply of oil is very elastic over short time periods but becomes perfectly inelastic over time. A given shift in supply results in a greater increase in the price of oil when the supply of oil is perfectly inelastic.
B
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During the course of a week, McDonald's has enough time to hire or layoff workers, but it does not have enough time to expand its kitchen or add an additional seating area. In this situation, McDonald's:
a. has no fixed costs. b. is in the short run. c. suffers an economic loss. d. earns a large profit.
When quantity supplied equals quantity demanded, there is:
a. disequilibrium b. excess quantity supplied. c. a market-clearing price (equilibrium price). d. excess quantity demanded. e. a shortage.
When the residents of a nation are free to trade with foreigners, domestic producers will be able to
What will be an ideal response?
Larry was accepted at three different graduate schools, and must choose one. Elite U costs $50,000 per year and did not offer Larry any financial aid. Larry values attending Elite U at $60,000 per year. State College costs $30,000 per year, and offered Larry an annual $10,000 scholarship. Larry values attending State College at $40,000 per year. NoName U costs $20,000 per year, and offered Larry a full $20,000 annual scholarship. Larry values attending NoName at $15,000 per year. Larry's opportunity cost of attending State College is:
A. $30,000 B. $35,000 C. $20,000 D. $15,000