An Industry Has 1,000 Firms, Each with the Production Function

question 40

Multiple Choice

An industry has 1,000 firms, each with the production function f(x₁, x₂) =x^1/2₁x^1/2₂.The price of factor 1 is $1 and the price of factor 2 is $1.In the long run, both factors are variable, but in the short run, each firm is stuck with using 100 units of factor 2.The long-run industry supply curve is

• A)upward sloping with zero supply if price is less than $10.
• B)downward sloping for outputs less than 10.
• C)horizontal with zero supply for prices less than $2 and infinite supply for prices greater than $2.
• D)horizontal with zero supply for prices less than $10 and infinite supply for prices greater than $10.
• E)upward sloping with zero supply if price is less than $20.

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Definitions:

Solar Energy

Energy derived from the sun's rays, which can be converted into other forms of energy such as electricity or heat.

Electron Transport

A series of chemical reactions within a cell that transfers electrons from donor molecules to acceptor molecules, creating energy.

Photosystem I

A complex of proteins and pigments in chloroplasts that absorbs light during photosynthesis, playing a key role in the light-dependent reactions by passing electrons to a series of electron carriers.

Photosystem II

A component of the chloroplasts in plants and algae involved in the light-dependent reactions of photosynthesis, particularly in water-splitting and oxygen production.