What is the relationship between the long-run supply curve in a constant-cost industry and elasticity?
What will be an ideal response?
For the graph, quantity or output will be on the horizontal axis and price will be on the vertical axis. The long-run supply curve for a constant cost industry will be perfectly elastic. This means it will be horizontal, showing that the level of output will not affect the price in the long run. Firms can obtain all the resources they need at different output levels without affecting the minimum average total cost of production.
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A budget line can show all butoneof the following statements below. Which one does itnotshow?
A. The budget line shows the available choices to a household. B. It is a curve of constant expenditure. C. The slope of the budget line increases as the quantity of a good consumed increases. D. The budget line shows how much it costs to purchase a combination of two goods, for a set income and prices.
In February, 2010 the U.S. M1 money multiplier crashed to 0.786. Each $1 increase in the monetary base resulted in the quantity of money increasing by only $0.79. Where did the remaining $0.21 disappear?
A) Banks held part of the $0.21 as excess reserves. B) Banks loaned out the $0.21. C) Consumers held part of the $0.21 as currency. D) Both A and C are correct.
Draw a production function and illustrate the effects of capital investment and technological improvement on labor productivity
Which of the following is the best example of an automatic stabilizer?
a. a balanced federal budget b. the minimum wage c. unemployment compensation program d. discretionary fiscal policy