Suppose all firms have constant marginal costs that are the same for each firm in the short run. In this case, the market level supply curve is ________ and producer surplus equals ________:
A) perfectly inelastic, fixed costs
B) perfectly inelastic, zero
C) perfectly elastic, fixed costs
D) perfectly elastic, zero
D
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In general, a fine on smoking cigarettes shifts the ________ curve of cigarettes ________
A) supply; rightward B) supply; leftward C) demand; rightward D) demand; leftward
The fraction of additional income that households will spend on consumption is called;
(a) The marginal propensity to consume; (b) The average propensity to consume; (c) The Keynesian multiplier; (d) All of the above.
Consider the two graphs below. Graph A represents a typical firm in a purely competitive industry. Graph B represents the supply and demand conditions in that industry. The dashed horizontal line represents the current market price for firms and for
the industry. In the long run, what will happen to price, profit, the supply curve, and the number of firms in the industry? What will be an ideal response?
The input-substitution effect associated with an increase in the wage implies that as the wage increases, a firm will substitute other inputs for the relatively expensive labor.
Answer the following statement true (T) or false (F)