What determines whether the industry long-run supply curve is upward sloping or horizontal?
What will be an ideal response?
When firms enter and exit the industry, new resources are either drawn into the industry or are temporarily left unemployed. If these movements in resources cause resource prices to rise, then the industry will be an increasing-cost industry and have an upward sloping long-run supply curve. If these movements in resources do not affect resource prices, then the industry is a constant-cost industry and the long-run supply curve is horizontal.
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A method of analyzing the strategic interaction that occurs between small numbers of people, firms, organizations, or countries is called
A) clinical observation. B) microdemographics. C) forensic economics. D) game theory.
One of the consequences of inflation between 1950 and the 1970s was ________
A) a large increase in the federal deficit as a percentage of GDP B) a relaxation of the government budget constraint C) an increase in the dependency ratio D) a reduction in the ratio of debt to GDP
The economic impact of a change in spending, working through the multiplier, takes effect
A. immediately. B. very quickly, with a small number of rounds of spending. C. after a very long period of time. D. after multiple rounds of spending occur.
Wealthy families wanting finer homes and nicer vacations exemplify
A. capital. B. production. C. resources. D. scarcity.