Supply curves that are horizontal are called perfectly elastic and have an infinite elasticity, whereas supply curves that are vertical are called perfectly inelastic and have a zero elasticity
a. True
b. False
Indicate whether the statement is true or false
False
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Diminishing marginal returns refers to the fact that
a. holding other inputs constant, additional increases in labor lead to smaller changes in output. b. holding other inputs constant, additional increases in labor lead to lower output. c. additional increases in labor always lead to smaller changes in output d. the returns to labor fall as real wages rise.
For a hotdog vendor, the hotdog stand represents his
A) fixed input. B) variable input. C) diseconomies of scale. D) none of the above.
Suppose the current price of a pound of steak is $12 per pound and the equilibrium price is $9 per pound. In this case, there is a
A) surplus, so the price falls and quantity supplied increases. B) surplus, so the price rises and quantity demanded increases. C) shortage, so the price rises and quantity demanded decreases. D) shortage, so the price falls and quantity demanded increases. E) surplus, so the price falls and quantity demanded increases.
In Figure 5-18, point D for the consumer
A. will be chosen because total utility is larger there than at point C. B. would not be chosen because it is less desirable than point C. C. is unattainable, given the consumer’s budget. D. has total utility equal to point C.