A constant-cost industry is distinguished by the fact that
a. firms' long-run average cost curves are horizontal
b. firms' short-run marginal cost curves are horizontal
c. firms' short-run average total costs are horizontal
d. the short-run industry supply curve is perfectly elastic
e. the long-run industry supply curve is perfectly elastic
E
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Assume that the market for consumer gasoline is perfectly competitive. When one additional seller (gas station) enters the market,
A) then at least one other seller must exit the market. B) the price of gasoline increases. C) the price of gasoline is left unaffected. D) the price of gasoline decreases. E) None of the above is correct.
Currency outside of banks increases from $100 million to $200 million. This change is considered
A) a currency drain. B) a decrease in the monetary base. C) expansionary monetary policy. D) contractionary monetary policy.
Refer to Figure 4-5. The figure above represents the market for pecans. Assume that this is a competitive market. At a quantity of 12,000 pounds
A) the marginal cost of pecans is greater than the marginal benefit; therefore, output is inefficiently high. B) the marginal benefit of pecans is greater than the marginal cost; therefore, output is inefficiently high. C) the marginal cost of pecans is greater than the marginal benefit; therefore, output is inefficiently low. D) producers should lower the price to $3 in order to sell the quantity demanded of 12,000.
Refer to Table 2-11. What is South Korea's opportunity cost of producing one pound of wheat?
A) 60 digital cameras B) 20 digital cameras C) 5 digital cameras D) 0.05 units of a digital camera