Answer the following questions true (T) or false (F)
1. The short run is the time period during which a firm has at least one input constraint.
2. A characteristic of the long run that is not available in the short run is that a firm is free to vary its output.
3. Consider a manufacturing operation that uses specialized machinery and labor to produce its output. In this case, the input that is not fixed in the short run is labor.
1. TRUE
2. FALSE
3. TRUE
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All else held constant, if the price of a resource used to produce product X falls, the
A. demand curve of X will shift to the right. B. supply curve of X will shift to the left. C. supply curve of X will not shift. D. supply curve of X will shift to the right.
A tax cut that increases the budget deficit results in ________ in the ________ loanable funds
A) an increase; supply of B) a decrease; supply of C) an increase; demand for D) a decrease; demand for E) no change; either the demand for or the supply of
Molly received an autographed poster of David Hasselhoff for her 21st birthday
Her friend Helga offered her $50 for the poster, but Molly refused to sell the poster even though she knows she would never pay that much to replace it if it was ever damaged or destroyed. Explain this inconsistency in Molly's behavior.
With respect to the market clearing price and the equilibrium quantity for good X, an increase in the demand for and a decrease in supply of the good definitely will
A) increase the market clearing price and the equilibrium quantity of good X. B) decrease the market clearing price and the equilibrium quantity of good X. C) increase the market clearing price of good X but lower the equilibrium quantity of X. D) increase the market clearing price of good X but have an uncertain impact on the equilibrium quantity of X.