Use the figure below to answer the following question.
The diagram concerns supply adjustments to an increase in demand (D1 to D2) in the immediate period, the short run, and the long run. On the basis of this illustration, we can conclude that
A. the amount of time producers have to adjust to a change in demand is not a determinant of the elasticity of supply.
B. supply is relatively more inelastic the greater the amount of time producers have to adjust to a change in demand.
C. short-run adjustments are more economically efficient than are long-run adjustments.
D. supply is relatively more elastic the greater the amount of time producers have to adjust to a change in demand.
Answer: D
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Suppose that if the price of plane tickets increased, more people would choose to travel by train. If this happened, you would know that:
A. plane tickets and train tickets are complements. B. plane tickets are an inferior good. C. the cross-price elasticity between plane tickets and train tickets is negative. D. the cross-price elasticity between plane tickets and train tickets is positive.
The people who immediately benefit from a minimum wage are
A) employers who now pay the minimum wage. B) those people who enter the labor force to search for minimum wage jobs. C) the workers who retain their jobs after enactment of the minimum wage. D) everyone, both demanders and suppliers, because the minimum wage benefits everyone. E) all workers.
When theaters charge lower prices for matinee showing, it is not price discrimination, since it is more expensive to operate a theater during the day, as compared to the evening hours.
Answer the following statement true (T) or false (F)
The duopoly price provides a greater incentive to maintain cartel pricing than does the grim- trigger strategy.
Answer the following statement true (T) or false (F)