How does the time frame over which a supply decision is made influence the elasticity of supply? Explain your answer
What will be an ideal response?
The momentary supply, short-run supply, and long-run supply all illustrate the response of suppliers to changes in the price, but they differ according to how much time has elapsed after the price change.
• The momentary supply is frequently the least elastic and shows how suppliers cannot easily respond to a price change immediately after the price change occurs. Changing the quantity produced means changing the inputs into the production process, which takes time to complete. Sometimes the momentary supply is perfectly inelastic.
• The short-run supply shows suppliers' response after enough time has elapsed for some, but not all, of the possible technological adjustments have occurred. Short-run supply generally is intermediate in elasticity between the momentary supply and the long-run supply.
• The long-run supply shows how suppliers react after enough time has passed that all possible adjustments to factors of production have been made to accommodate the price change. It usually is the most elastic of the three supplies.
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A) 0.11 B) 0.37 C) 2.69 D) 9.33
The problem of getting an accurate reading on current economic developments is known as the
A) data problem. B) recognition lag. C) impact lag. D) information problem.
Suppose there is a policy debate regarding the United States’ imposing trade restrictions on imported ball bearings.
Domestic producers of ball bearings send a lobbyist to the U.S. government to request that the government impose trade restrictions on imports of ball bearings. The lobbyist claims that the U.S. ball-bearing industry is new and cannot currently compete with foreign firms. However, if trade restrictions were temporarily imposed on ball bearings, the domestic ball-bearing industry could mature and adjust and would eventually be able to compete in the world market. Which of the following justifications is the lobbyist using to argue for the trade restriction on ball bearings? A. Jobs argument B. National-security argument C. Unfair-competition argument D. Infant-industry argument E. Using-protection-as-a-bargaining-chip argument
The physical import of DVD players to the United States from Japan best illustrates a:
A. resource flow. B. financial flow. C. trade flow. D. technology flow.