An increase in quantity supplied might be caused by an increase in production costs.
Answer the following statement true (T) or false (F)
False
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If a perfectly competitive firm incurs an economic loss, it should
A) shut down immediately. B) try to raise its price. C) shut down in the long run. D) shut down if this loss exceeds fixed cost.
Suppose that at the current level of output, Pat's Hats has fixed costs of $500, variable costs of $1,000 . and $2,000 in total revenue. Which of the following is true?
a. Profit is currently $500 and, in the long run, it will be $1,000 because there will be no fixed costs. b. Profit is currently $500 and, in the long run, it will be $1,500 because there will be no variable costs. c. Profit is currently $500. d. Profit is currently $500, and Pat's Hats will want to decrease its plant size in the long run to lower its fixed costs. e. Pat's Hats will continue to operate as long as revenue is greater than $500.
Which of the following could be used to support the argument that the natural rate of unemployment has fallen in the last ten years?
A. The proportion of young people in the labor force is shrinking. B. Many people who would normally be counted as unemployed are behind bars. C. Workers are more insecure because of numerous plant closings and corporate downsizing, and as a result, are less likely to quit their jobs to look for work elsewhere. D. All of the choices are correct.
Which of the following illustrates the principle of second best?
A. A tax imposed on land, because this tax distorts economic decisions less than taxes on other factors of production. B. The government imposes a tax on a paper manufacturer that equals the cost of cleaning the river damaged by the waste discharged into the river by the paper manufacturer. C. The government decides to impose taxes on all grains, rather than imposing a tax only on wheat. D. The government imposes taxes on gasoline, and the tax revenue collected is used to pay for road repair.