One reason that explains why the short-run aggregate supply curve is upward sloping is:
A. the lag involved with public policy making.
B. the changing profit levels experienced by firms.
C. sticky wages.
D. cartels keeping prices artificially high.
Answer: C
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In the mathematical formulation of the short-run production function:
A) the quantity of output is usually assumed to be fixed. B) the quantity of capital employed is usually assumed to be fixed. C) the quantity of both labor and capital employed are usually assumed to be fixed. D) the quantity of both labor and capital must be allowed to vary so that output can vary in the short run.
If the market for bottled spring water is characterized by a very elastic supply curve and a very inelastic demand curve, an outward shift in the supply curve would be reflected primarily in the form of:
a. higher prices. b. higher output. c. lower prices. d. lower output.
Household production is more likely to occur when
a. it requires many specialized resources b. technology makes it easier than market production c. tax avoidance is undesirable d. less control over the final product is desirable e. the opportunity cost of household production is high
If market structures are ranked from the one in which firm(s) face the flattest demand curve to the one where they face the steepest, the correct order is
a. monopoly, monopolistic competition, perfect competition b. monopolistic competition, perfect competition, monopoly c. monopolistic competition, monopoly, perfect competition d. perfect competition, monopoly, monopolistic competition e. perfect competition, monopolistic competition, monopoly