If supply is perfectly elastic, the price elasticity of supply is equal to:
A. 1.
B. 0.
C. infinity.
D. a positive number between 0 and infinity.
Answer: C
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Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
If a country experiences a real GDP growth rate of 6 percent, real GDP will double in
A) 10 years. B) 17.5 years. C) 16.67 years. D) 11.67 years. E) 14 years.
All firms in a competitive industry have the following long-run total cost curve:
C(q) = q3 – 10q2 + 36q where q is the output of the firm. a. Compute the long run equilibrium price. What does the long-run supply curve look like if this is a constant cost industry? Explain. b. Suppose the market demand is given by Q = 111 – p. Determine the long-run equilibrium number of firms in the industry.
For a monopoly, when marginal revenue is zero:
A. marginal revenue is minimized. B. total revenue is maximized. C. profits are maximized. D. marginal costs are minimized.