Which of the following is false about the long run?
a. The long-run equilibrium output for a firm in perfect competition occurs at the lowest point on the average total cost curve.
b. The shape of the long-run supply curve depends on the extent to which input costs change when there is entry or exit of firms in the industry.
c. In a constant-cost industry, the prices of inputs do not change as
output is expanded.
d. In an increasing-cost industry, the cost curves of the individual firms rise as the total output of the industry decreases.
d
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If businesses expect the economic activity to expand
A) the planned investment function relating investment to the interest rate will shift to the left. B) the planned investment function relating investment to the interest rate will remain unchanged, but will move downward along the curve. C) the planned investment function relating investment to the interest rate will steepen. D) the planned investment function relating investment to the interest rate will shift to the right.
If the price elasticity of supply is 1.2, and price increased by 5%, quantity supplied would
a. increase by 4.2%. b. increase by 6%. c. decrease by 4.2%. d. decrease by 6%.