The supply of both physical and human resources in the long run is determined primarily by
a. the presence or absence of economies of scale.
b. investment choices and resource depreciation.
c. sunk costs; what happens in the present cannot change the future.
d. the law of diminishing marginal returns.
B
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In an economy in which labor is mobile and homogeneous, the wages between industries:
a. will be equal. b. will be very unequal. c. will be less in the export industry. d. will be unequal because in some firms the management is more fair to its workers.
To answer the "HOW" to produce question, society should:
A. Use all the available labor. B. Maximize the quantity of all resources used. C. Find an optimal method of producing goods and services. D. Attempt to produce a combination of goods and services beyond the production possibilities.
Figure 6.1If the good in Figure 6.1 were free:
A. consumer surplus would equal $450 and consumer expenditure would be $0. B. consumer surplus and consumer expenditure would both be maximized. C. consumer surplus and consumer expenditure would both be zero. D. consumer surplus would be maximized but consumer expenditure would be impossible to calculate.
Suppose an economic advisor to the President recommended a personal income tax increase. Indicate the expected effects on aggregate demand and on aggregate supply.
What will be an ideal response?