Frank owns Frank's Shoes. During a particular period, the price of shoes rises and Frank produces more shoes by hiring more workers and using more material, such as leather. However, he still works with the same size factory because he has a long-term lease. You know that
a. by producing more, Frank's supply curve of shoes shifts to the right
b. the factory is overworked so that Frank cannot maintain the production levelhe selected
c. by producing more, Frank's demand curve for shoes shifts to the left
d. Frank is producing in the short run
e. Frank is producing in the long run
D
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The imposition of a tax on a good enables the government to
A) raise the price received by sellers of the goods that have been taxed. B) lower the price paid by buyers for the goods that have been taxed. C) create a more efficient economic system. D) take part of consumer and producer surplus as tax revenue when the good is purchased. E) decrease the deadweight loss in this market.
Which of the following barriers to entry is is most likely to result in the creation of of new products and production processes?
A) Patents. B) Licenses. C) Ownership of an essential raw material. D) Significant economies of scale.
In a simple economy (no government sector), the equilibrium level of GDP will be less than the full employment level of income if, at the full employment level of income, the
a. saving that consumers want to do is less than investing that businesses want to do. b. saving that consumers want to do is greater than investing that businesses want to do. c. saving that consumers want to do is less than spending that consumers want to do. d. inventories are being depleted.
Tom's Donuts can invest in a new espresso machine that costs $300 and will yield expected profits of $200 each year for two years. At lower interest rates, the present discounted value of profits from the investment
A. decreases. B. increases. C. is unchanged. D. is indeterminate from the given information.