Author Question: How does the idea of efficient markets influence the long-run market adjustment mechanism? What ... (Read 98 times)

DyllonKazuo · **on:** Jun 29, 2018

How does the idea of efficient markets influence the long-run market adjustment mechanism?

What will be an ideal response?

Question 2

Refer to Figure 2-3. Sergio Vignetto raises cattle and llamas on his land. His land is equally suitable for raising either animal. Which of the graphs in Figure 2-3 represent his production possibilities frontier?

A) Graph A
B) Graph B
C) Graph C
D) either Graph A or Graph C
E) either Graph B or Graph C

wergv · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

Investment capital flows toward profit opportunities. In the long run this leads to entry, exit, expansion, and contraction in an industry.

Answer to Question 2

A