Which of the following is the best example of the law of supply?
a) A sandwich shop increases the number of sandwiches they supply every day when the price is increased
b) A food producer increases the number of acres of wheat he grows to supply a milling company
c) A catering company buys a new dishwasher to make their work easier
d) A milling company builds a new factory to process flour to export
Ans: a) A sandwich shop increases the number of sandwiches they supply every day when the price is increased
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Consider the following:
(i) Suppose the firm is in the short run, and consider the first stage of production. What happens to the average product of labor when the firm adds an additional worker? What causes this change in labor productivity? (ii) Repeat part i for the second stage of production.
Explain the supply and demand of products, factors of production, and the payments for the products and factors of production as described in the circular flow diagram
What will be an ideal response?
A negative demand shock would lead to a decline in both the price level and output in the short run
a. True b. False
The profit-maximizing price and quantity established by a perfectly competitive firm in the above figure are
A. Q3 units of output and a price of P3. B. Q1 units of output and a price of P5. C. Q4 units of output and a price of P4. D. Q1 units of output and a price of P1.