Chapter 24 Flashcards
The short run industry supply curve can be found by horizontally summing the short run supply curves of all the individual firms in the industry.
T
It is possible to have an industry in which all firms make zero economic profits in long run equilibrium.
T
The possibility of more firms entering an industry in the long run tends to make long run industry supply more price elastic than short run industry supply.
T
In a competitive market, if both demand and supply curves are linear, then a per unit tax of $10 will generate exactly the same deadweight loss as a per unit subsidy of $10.
T
If there are constant returns to scale in a competitive industry, then the long run industry supply curve for that industry is horizontal.
T
If some firm in an industry has the production function F(x, y) = x^(3/4)y^(3/4) where x and y are the only two inputs in producing the good, then that industry can not be competitive in the long run.
T
The market for a good is in equilibrium when the government unexpectedly imposes a quantity tax of $2 per unit. In the short run, the price will rise by $2 per unit so that firms can regain their lost revenue and continue to produce.
F
The short run industry supply curve can be found by horizontally summing the short run supply curves of all the individual firms in the industry.
T
It is possible to have an industry in which all firms make zero economic profits in long run equilibrium.
T
The possibility of more firms entering an industry in the long run tends to make long run industry supply more price elastic than short run industry supply.
T
In a competitive market, if both demand and supply curves are linear, then a per unit tax of $10 will generate exactly the same deadweight loss as a per unit subsidy of $10.
T
If there are constant returns to scale in a competitive industry, then the long run industry supply curve for that industry is horizontal.
T
If some firm in an industry has the production function F(x, y) = x^(3/4)y^(3/4) where x and y are the only two inputs in producing the good, then that industry can not be competitive in the long run.
T
The market for a good is in equilibrium when the government unexpectedly imposes a quantity tax of $2 per unit. In the short run, the price will rise by $2 per unit so that firms can regain their lost revenue and continue to produce.
F
