If a linear supply curve has a zero intercept, the elasticity of supply is always unitary
What will be an ideal response?
True. A linear supply curve from the origin takes the form Q = ap. Elasticity equals a ? p/Q. Substituting for Q yields a ? p/ap. Numerator and denominator cancel and the elasticity equals one at every price.
You might also like to view...
Suppose the marginal product of labor in the economy is given by MPN = 200 - 0.5 N, while the supply of labor is 100 + 4w
(a) Find the market-clearing real wage rate. (b) What happens if the government imposes a minimum wage of 40? Is there involuntary unemployment? (c) What happens if the government imposes a minimum wage of 60? Is there involuntary unemployment?
A professor of economics gets a $100 a month raise. She figures that even with her new monthly salary she will be unable to buy as many goods and services as she could 12 months ago
a. Her real and nominal salary have risen. b. Her real and nominal salary have fallen. c. Her real salary has risen and her nominal salary has fallen. d. Her real salary has fallen and her nominal salary has risen.