A situation in which there is a reduction in quantity supplied to zero when there is the slightest decrease in price is
A) perfectly elastic supply.
B) perfectly elastic demand.
C) perfectly inelastic supply.
D) perfectly inelastic demand.
A
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The purchase by a foreign government of an airplane produced in the United States is included in U.S
A) government purchases. B) investment expenditures. C) consumption expenditures. D) net exports.
The production function Y = AK?L1-? exhibits
a. constant returns to scale. b. diminishing marginal returns to scale. c. increasing returns to scale. d. decreasing returns to scale. e. both a and b.
Stockholders manage risk by
A) electing the board of directors. B) appointing day-to-day managers. C) diversifying their portfolios. D) having lots of bonds in their portfolios.
If a perfectly competitive firm produces an output level at which price is less than marginal costs, then the firm should:
A. expand output to earn greater profits or smaller losses. B. reduce output to earn greater profits or smaller losses. C. leave its output level unchanged provided it is covering its variable cost. D. raise its price.