Suppose Several Industries Compete for the Available Supply of a Particular

question 2

Multiple Choice

Suppose several industries compete for the available supply of a particular input.In a multi-industry market like this,which of the following statements about the input supply curve facing a single industry will be true?

• A)Each industry's input supply curve is an equal proportion of the total market supply of the input.
• B)The vertical summation of the industry input supply curves gives the market supply curve for the input.
• C)The smaller the share of the total input employed by the industry,the more elastic its input supply curve.
• D)The input supply curve for a single industry in a multi-industry input market is perfectly elastic over all levels of employment of the input.

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Definitions:

Edgeworth Box

A diagram used in economics to show the distribution of resources and the allocation of goods in a two-person, two-good economy.

Contract Curve

In economics, the curve that represents the set of Pareto efficient allocations in an Edgeworth Box diagram.

Utility Function

A symbolic depiction illustrating the ranking of preferences a consumer holds across various goods or outcomes.

Edgeworth Box

A diagram used in economics to show the distribution of resources and the potential gains from trade between two individuals in a pure exchange economy.