Supply curves are positively-sloped because of:
a. the inefficient allocation of resources.
b. the law of increasing returns.
c. the increasing opportunity cost of resources.
d. self-interested suppliers seeking economic profit.
e. economies of scale.
c. the increasing opportunity cost of resources.
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
When the market for a commodity is in equilibrium:
A) there will still be some unsold stock of the commodity. B) all sellers of the commodity will want to change their behavior. C) no economic agent will want to change his or her behavior. D) all buyers of the commodity will want to change their behavior.
Marginal utility theory predicts that when income increases a
A) person's total utility will not change. B) person might increase the consumption of some normal goods and decrease the consumption of other normal goods. C) person's consumption of normal goods will increase. D) None of the above answers is correct because marginal utility theory does not address how demand changes in response to changes in income.
Jill Johnson owns a pizzeria. She currently produces 10,000 pizzas per month at a total cost of $500. If she produced one more pizza her total cost rises to $500.11. What does this tell us about Jill's marginal cost of producing pizzas?
A) The marginal cost of producing pizzas cannot be determined without more information. B) The marginal cost of producing pizzas is rising. C) The marginal cost of producing pizzas is constant. D) The marginal cost of producing pizzas is falling.