Which of the following will cause an increase market supply?
A. A decrease in the number of firms in the market.
B. A technological innovation that lowers the marginal cost of producing the good.
C. An increase in the price of the good.
D. An increase in demand for the good.
Answer: B
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Faced with a shortage of funds to pay claims, the workman's compensation systems in many states have been forced to raise the workman's compensation tax rate substantially. The tax is paid by employers. Employers have complained that they cannot afford the tax and threaten to go out of business. Assuming the supply of labor is very inelastic, one can argue that ultimately the burden of this tax
actually will rest a. mostly on workers. b. mostly on employers. c. about 50/50 on workers and employers, like the Social Security tax. d. all on employers by statute.
Which of the following is an examples of spending on factors of production in the circular flow model?
The age-earning cycle predicts that a typical person will
A) be earning $50,000 in the year 2010. B) be earning the lowest income right before retirement. C) be earning the highest income right before retirement. D) be earning the highest income at about the age 45-50.
If the minimum efficient scale of a firm is small relative to the demand for the good, then
A) many small firms can compete in the market. B) several large firms will enter the market thereby reducing competition. C) there will be no economic profits for any small firms, so no new firms will ever enter the market. D) the firms already in the market have lower average total cost than any new firm entering the market.