A perfectly elastic long-run supply curve indicates
A) a decreasing-cost industry.
B) a constant-cost industry.
C) an increasing-cost industry.
D) that some input prices change as firms enter and exit the industry.
Answer: B
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The classical model
a. is another name for the short-run macro model b. was developed to explain the long period of poor economic performance during the Great Depression c. is an attempt to explain why the economy tends to perform rather well over long periods of time d. is believed by most economists to be a better explanatory model for short-term, rather than long-term, economic performance e. was not really accepted as a legitimate economic theory until the 1950s
Without government intervention, public goods would
a. be much less expensive. b. not be provided. c. be produced in much larger quantity. d. be priced within the income ability of all individuals to purchase them.