Investment in social overhead capital refers to investment in areas like power plants and road construction.
Answer the following statement true (T) or false (F)
True
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If demand is perfectly inelastic
A) then a 1% increase in price leads to a fall in quantity of greater than 1%. B) then a 1% increase in price leads to a fall in quantity of less than 1%. C) then a 1% increase in prices then quantity demanded falls to zero. D) then a 1% increase in price has no effect on quantity demanded.
A firm is more likely to produce its own input if all of the following are true except which one?
A) The firm has trade secrets. B) The firm is concerned about the hold-up problem. C) The firm experiences diseconomies of scale when producing the input. D) The transportation cost of the input is expensive.
Which of the following carries out the distribution process by rationing goods on the basis of preferences and relative incomes?
a. Administered system b. Government c. Price system d. Central planning
Exhibit 3-4 Supply curves
In Exhibit 3-4, a shift in the supply curve from S1 to S2 represents a(n):
A. decrease in supply. B. decrease in the quantity supplied. C. increase in supply. D. increase in the quantity supplied.