Answer the following statement(s) true (T) or false (F)
1. The price elasticity of supply measures the relative change in the quantity consumers demand that results from a change in price.
2. The price elasticity of supply is defined as the percentage change in the quantity supplied multiplied by the percentage change in price.
3. In a condition of perfectly inelastic supply, an increase in price will not change the quantity supplied.
4. In a condition of perfectly elastic supply, the elasticity of supply is 100.
5. Supply is usually more elastic in the short run than in the long run.
1. False
2. False
3. True
4. False
5. False
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When production costs fall,
a) the aggregate-demand curve shifts to the right. b) the short-run aggregate-supply curve shifts to the right. c) the short-run aggregate-supply curve shifts to the left. d) the aggregate-demand curve shifts to the left.
The marginal social cost of production is the
A) marginal private cost plus the marginal external cost. B) same as the marginal cost of any externality. C) total cost of any externality. D) marginal private cost minus the marginal external cost.