Over time in a growing economy, the long run aggregate supply curve will
A) shift inward to the left.
B) shift outward to the right.
C) become increasingly stee
B
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Two isoquants, which represent different output levels but are derived from the same production function, cannot cross because
A) isoquants represent different utility levels B) this would violate a technical efficiency condition C) isoquants are downward sloping D) additional inputs will not be used by profit maximizing firms if those inputs decrease output E) Both B and D are true.
Figure 7-4
Following a rash of airplane bombs, the airlines have been forced to increase security at a cost of $30 million per year. The number of inspectors and machines does not vary with the number of passengers-the airlines must have sufficient staff available to handle the full-capacity load. Which graph in Figure 7-4 best illustrates the impact of the security expenditures?
a. 1
b. 2
c. 3
d. 4