Relative to a mobile factor of production, economic theory suggests that the price elasticity of supply for a highly immobile factor of production (for example, land) will be
a. more elastic.
b. less elastic.
c. of unitary elasticity.
d. this is a trick question; the price elasticity of supply for factors of production is not affected by factor mobility.
B
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Exhibit 36-1 Bond FaceValueof Bond Price ofthe Bond Annual CouponPayment A $1,000 $850 $25 B $1,000 $950 $41 C $1,000 $1,100 $52 D $1,000 $1,100 $32 E $1,000 $1,000 $50 Refer to Exhibit 36-1. For which bond is the yield and the coupon rate the same?
A. Bond A B. Bond B C. Bond C D. Bond D E. Bond E
Bill lives in Montana and likes to grow zucchini. He applies fertilizer to his crops twice during the growing season and notices that the second layer of fertilizer increases his crop, but not as much as the first layer. What economic concept best explains this observation?
A. The law of diminishing marginal utility. B. The law of diminishing returns. C. Return equalization principle. D. The principal-agent problem.