If a perfectly competitive industry uses a large proportion of the available inputs in a resource market, then the long-run market supply curve for the industry will most likely be:
a. vertical

Answer the following questions true (T) or false (F)

1. A profit-maximizing firm will use an input up to the point where the cost of the input equals the marginal revenue received by the firm. 2. Marginal cost is the additional cost created by the next, or marginal unit of the variable input. 3. Net income represents the accountant's version of after-tax profits.

Quebec is capable of producing 10,000 pallets of wood shingles or 8,000 barrels of maple syrup. Vermont is capable of producing 12,000 pallets of wood shingles or 12,000 barrels of maple syrup. a. Graph these production possibilities curves. Indicate from the slope, which has the absolute advantage, which the comparative advantage, and whether there are gains from trade. b. Assume that Vermont and Quebec each specializes in the good in which they have a comparative advantage. Suppose that Vermont and Quebec decide to trade 5,000 pallets of shingles for 5,000 barrels of syrup. Indicate this on the graph. How does this affect the well-being of the two societies? Explain.

What will be an ideal response?