Which of the following statements is valid when supply is perfectly elastic at a price of $4?
a. The elasticity of supply approaches infinity.
b. The supply curve is vertical.
c. At a price below $4, quantity supplied is infinite.
d. At a price above $4, quantity supplied is zero.
a
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"Learning by doing" results in decreased average costs of production and is illustrated by a downward shift of the firm's long-run average cost curve
Indicate whether the statement is true or false
Which of the following is not a possible explanation as to why wage inequality increased markedly over the last 40 years in the United States?
A. There was an increase in the supply of low-skill workers, particularly through immigration. B. Recent technological changes have been complementary to skilled labor while substituting for unskilled labor. C. Competition from international economies has increased demand for highly productive workers. D. Institutional changes in the United States such as a steady decline in union coverage and a falling real minimum wage have led to changes in the wage distribution. E. Federal legislation allowed employers to legally engage in more racial discrimination.
Disposable personal income:
A. includes personal income taxes. B. excludes personal income taxes. C. excludes transfer payments. D. is income spent for personal items such as homes and cars.
According to the AD-AS diagram, short-term, an anti-inflation policy creates:
A. lower inflation. B. higher unemployment. C. higher output. D. higher inflation.