If a supply curve has a constant slope throughout its length, it must have a constant price elasticity throughout its length.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 2Under long-run perfect competition, which of the following are the same (equal) at all levels of output?
a. Price and marginal cost.
b. Price and marginal revenue.
c. Marginal cost and marginal revenue.
d. All of these.
QUESTION 3In response to a price change for good Y, if the cross-elasticity of demand for good Y is positive, good X and good Y are complements.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 4In a perfectly competitive industry, assume the short-run average total cost increases as the output of the industry expands. In the long run, the industry supply curve will:
a. first have a positive slope and then a negative slope.
b. have a negative slope.
c. be perfectly horizontal.
d. be perfectly vertical.
e. have a positive slope.
QUESTION 5In response to a price change for good Y, if the cross-elasticity of demand for good Y is negative, good X and good Y are substitutes.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 6In a perfectly competitive industry, assume there is a permanent increase in demand for a product. The process of transition to a new long-run equilibrium will include:
a. the exit of firms.
b. temporarily lower production costs.
c. both a and b.
d. neither a nor b.
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