Natural gas is difficult to store. What implication does this fact have for the elasticity of supply of natural gas?
What will be an ideal response?
Because natural gas is difficult to store, the supply of natural gas is inelastic. With few storage facilities, it is very difficult (at least in the short run) to increase the quantity supplied by much even when prices rise substantially.
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Suppose that the exchange rate between the U.S. dollar and the Mexican peso starts out at $0.11 per peso. If the exchange rate then changes to $0.13 per peso, there will be a(n) __________ in the quantity demanded of dollars by Mexicans, and therefore there will be a(n) __________ in the quantity supplied of pesos to the foreign exchange market
A) decrease; decrease B) decrease; increase C) increase; decrease D) increase; increase
Tom and Jerry have two tasks to do all day: make dishes and build fences. If Tom spends all day making dishes, he will have make 16 dishes. If he instead devotes his day to building fences, Tom will build 4 fences. If Jerry spends his day making dishes, he will make 14 dishes; if he spends the day building fences, he will build 7 fences. If Jerry decides to specialize in building fences, what are the limits to his terms of trade?
A. Jerry will accept no less than 7 dishes for each fence. B. Jerry will accept no less than 2 dishes for each fence. C. Jerry will accept no less than 7 fences for each dishes. D. Jerry will accept no less than 2 fences for each dishes.