A constant-cost industry has an infinitely elastic long-run supply curve.
Answer the following statement true (T) or false (F)
True
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Which of the following statements differentiates between a shortage and a surplus?
A) A shortage occurs when price is held at the equilibrium price, but a surplus occurs when price is held above the equilibrium price. B) A shortage occurs when price is held below the equilibrium price, but a surplus occurs when price is held at the equilibrium price. C) A shortage occurs when quantity supplied exceeds quantity demanded, whereas a surplus occurs when quantity demanded exceeds quantity supplied. D) A shortage occurs when quantity demanded exceeds quantity supplied, whereas a surplus occurs when quantity supplied exceeds quantity demanded.
In the IS model, assuming that the real interest rate does not change, an increase in autonomous ________ leads to an increase in the equilibrium level of ________
A) investment; consumption B) consumption; investment C) net exports; investment D) all of the above E) none of the above
The AFC curve is
A. J.
B. K.
C. L.
D. M.
A market has four individuals, each considering buying a grill for his backyard. Assume that grills come in only one size and model. Abe considers himself a grill-master, and finds a grill a necessity, so he is willing to pay $400 for a grill. Butch is a meat-lover, honing his grilling skills, and is willing to pay $350 for a grill. Collin just met the girl of his dreams, and she loves a good grilled steak, so in his effort to impress her he is willing to pay $320 for a grill. Daniel loves grilled shrimp and thinks it might be cheaper in the long run if he buys a grill instead of eating out every time he wants grilled shrimp, so he is willing to pay $200 for a grill.If the market price of grills increases from $310 to $350, given the scenario described:
A. Collin and Butch would experience a decrease in consumer surplus, but Abe's consumer surplus would rise. B. total consumer surplus would fall by $120. C. total consumer surplus would fall by $90. D. Collin would experience a decrease in consumer surplus, but Abe and Butch would experience a rise in consumer surplus.