The short-run industry supply curve slopes up because
A. the firms eventually experience diseconomies of scale.
B. the higher price is needed to get more firms to enter the industry.
C. the law of diminishing marginal product applies in the short run.
D. wages increase as the industry increases output.
Answer: C
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John has two hours of free time this evening. He ranked his alternatives, first go to a concert, second go to a movie, third study for an economics exam, and fourth answer his e-mail. What is the opportunity cost of attending the concert for John?
A) attending a movie B) studying for an economics exam C) answering his e-mail D) attending a movie, studying for an economics exam, and answering his e-mail E) going to the concert because that is what John choose to do
Technological change will
A) shift the per-worker production function down. B) move the economy to a point beneath the per-worker production function. C) shift the per-worker production function up. D) move the economy along a given per-worker production function.
Hold Jared's preferences for pizza and Pepsi constant. Suppose Jared's income, as well as the prices of pizza and Pepsi, double. As a result,
a. both Jared's indifference curves and his budget constraint change. b. Jared's indifference curves change, but his budget constraint does not change. c. Jared's budget constraint changes, but his indifference curves do not change. d. neither Jared's indifference curves nor his budget constraint change.
Economic profits in the rent-a-wreck industry are $400,000 per firm. Assuming that the industry is perfectly competitive,
A. new firms will enter and the supply of the car rentals will increase. B. new firms will enter but there will be no effect on the supply of car rentals. C. firms will leave the industry and supply will fall. D. the industry is in equilibrium.