To economists, the main difference between the short run and the long run is that:
A. the law of diminishing returns applies in the long run, but not in the short run.
B. in the long run all resources are variable, while in the short run at least one resource is
fixed.
C. fixed costs are more important to decision making in the long run than they are in the short
run.
D. in the short run all resources are fixed, while in the long run all resources are variable.
Answer: B
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Gains from trade
A) result in being able to consume beyond the trading individuals' production possibilities frontiers. B) occur when one party to the trade has an absolute advantage in both goods. C) occur when people do not specialize. D) occur when opportunity costs are equal. E) always benefit one party but not the other party of any trade.
What are the economic implications of an inverted yield curve?
What will be an ideal response?