When a Resource Has a Perfectly Elastic Supply Curve

question 149

Multiple Choice

When a resource has a perfectly elastic supply curve

• A) the amount of economic rent for the resource is determined by its supply.
• B) the amount of economic rent for this resource is determined by demand for the resource.
• C) there is no economic rent being earned by this resource.
• D) the entire payment received by this resource is economic rent.

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Definitions:

LIFO Inventory Method

An accounting method where the last items of inventory purchased are the first ones used or sold, affecting the cost of goods sold and ending inventory values.

FIFO Inventory Method

A method of accounting for inventory that assumes the first items placed in inventory are the first sold.

Balance Sheet

A document that provides a snapshot of a corporation's assets, debts, and shareholder's equity at a given point in time.

Increasing Unit Costs

Refers to the situation where the cost to produce or purchase a single unit of product rises, often due to inflation, increased material costs, or labor costs.