Refer to the graph shown. If the price level is P0, then:
A. both input prices and output will fall in the long run.
B. both input prices and output will rise in the long run.
C. input prices will fall and output will rise in the long run.
D. input prices will rise and output will fall in the long run.
Answer: C
You might also like to view...
Income accrues to people who supply productive services, which means services that
A) add to the monetary income of the society. B) are in demand. C) contribute to social welfare. D) result in tangible or durable products. E) supply basic wants.
A perfectly competitive firm is more likely to shut down during a recession, when the demand for its product declines, than during an economic expansion, because during the recession it might be unable to cover its
A) fixed costs. B) variable costs. C) external costs. D) depreciation due to machinery becoming obsolete.
According to economists, competitive firms
A) compete for the same customers. B) are price takers. C) differentiate their products. D) are able to change output and affect the market price.
Some people attribute the rapid growth of the East Asian economies in the 1980s and 1990s to the:
A. success of their "industrial policies." B. governments picking industries to support with investments and favorable tax and trade policies. C. governments planning for growth by investing in certain industries. D. All of these are true.