When President Harry Truman said that he wanted to find a one-armed economist because his economic advisors always said, "On the one hand... and on the other hand... " he recognized that the advice of economists is often open to more than one interpretation. Why is this?
a. Economists cannot make up their minds on policy matters
b. Economists agree with each other on all policy issues.
c. Economists are aware that tradeoffs are involved in most policy questions.
d. Economists are often unable to identify the critical questions involved in policy issues.
c
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The price elasticity of supply measures how
A. responsive quantity supplied is to a change in incomes. B. easily labor and capital can be substituted for one another in the production process. C. responsive the quantity supplied of Y is to changes in the price of X. D. responsive the quantity supplied of X is to changes in the price of X.
Suppose a monopolistically competitive industry evolved into a perfectly competitive industry. Which of the following statements is correct?
A) The industry would produce more output and charge a lower price after the change. B) The industry would produce at decreasing returns to scale. C) Elasticity of demand for the firm's product would remain the same after this change occurred. D) This industry would produce the same level of output at lower prices in the long run than before the change.
Average variable costs:
A. always trend upward as output increases. B. always trend downward as output increases. C. decrease, then increase as output increases. D. increase, then decrease as output increases.
An increase in demand shifts the demand curve to the left
a. True b. False Indicate whether the statement is true or false