In a perfectly competitive industry, assume the short-run average total cost increases as the output of the industry expands. In the long run, the industry supply curve will:
a. first have a positive slope and then a negative slope.
b. have a negative slope.
c. be perfectly horizontal.
d. be perfectly vertical.
e. have a positive slope.
e
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Which of the following is not a contribution of small firms to development:
a. permit the economy to adjust to recession by hiring those laid off in the formal sector b. create employment c. source of training and skills d. use little capital e. all of the above are contributions of small firms
The actual real wage must be below the equilibrium real wage in order to encourage firms to produce at any output level above the natural rate
Once workers realize this situation, their expected price level will gradually rise and they will demand a higher nominal wage. This description of a business cycle adjustment is part of which of the following theories? A) Classical model B) original Keynesian model C) Friedman fooling model D) the RBC model
Which of the following is an explicit cost?
a. The opportunity cost of an owner/entrepreneur's time invested in the firm. b. The opportunity cost of the money the business owner/entrepreneur has invested in the firm. c. The wages paid to workers. d. None of the above.
Suppose that the demand curve for wheat is downward sloping and the price per bushel increases from $4.50 to $5.50. We would expect:
a. The demand for wheat to increase b. The quantity demanded of wheat to decrease c. The quantity demanded of wheat to increase d. Producers to reduce the number of bushels produced