The supply curve for gasoline will be more elastic in:
A. the short run because of the principle of diminishing returns.
B. the long run because of the principle of diminishing returns.
C. the short run because firms have more time in which to respond to the price change.
D. the long run because firms have more time in which to respond to the price change.
Answer: D
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Bubba's BBQ has fallen on some hard times. Bubba has analyzed his past revenue and cost information and knows that if he shuts down, he will incur an economic loss equal to $20,000 in remaining lease payments
Apparently, Bubba's current planning horizon is A) the short run because he still faces some fixed costs. B) the long run because he faces only variable costs. C) the short run because he faces only variable costs. D) neither the short run nor the long run because lease payments do not figure into cost determinations.
Which of the following will most likely cause a nation's currency to appreciate on the foreign exchange market?
a. A decrease in domestic interest rates b. An increase in foreign interest rates c. Domestic inflation of 10 percent while the nation's trading partners are experiencing stable prices d. Stable domestic prices while the nation's trading partners are experiencing 10 percent inflation
If the current year CPI is 140, then the price level has increased 40 percent since the base year
a. True b. False Indicate whether the statement is true or false
Shoe leather costs include the ________ due to the more frequent trips to the bank, the new cash management systems and the expanded employment in banks that inflation causes.
A. bracket creep and redistribution that occur B. time and effort that are used up C. substitution and price adjustment biases that arise D. deflating and indexing that are necessary