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When Output Is Less Than the Economy's Long-Run Capacity, Which

question 65

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When output is less than the economy's long-run capacity, which of the following is most likely to occur?


Definitions:

Input Prices

The prices of the resources (like labor, materials, and capital) used in the production of goods or services.

User Cost

The cost of using a resource, which includes the opportunity cost of not keeping the asset intact or not using it for an alternative purpose.

Rental Rate

Cost per year of renting one unit of capital.

Competitive Market

A competitive market is a market structure characterized by many buyers and sellers, such that no single participant has significant influence over the price of products or services.

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