Author Question: Suppose losses cause industry Z to contract, and as a result, the prices of inputs used intensively ... (Read 66 times)

future617RT · **on:** Jun 30, 2018

Suppose losses cause industry Z to contract, and as a result, the prices of inputs used intensively in the industry's production process fall. We know, as a result, that industry Z is:
a. an increasing cost industry.
b. a constant cost industry.
c. a decreasing cost industry.
d. experiencing diminishing returns.

Question 2

If the world price of steel is greater than the U.S. no-trade domestic equilibrium price of steel, the United States:
a. will not produce steel.
b. will demand steel from the rest of the world.
c. will supply steel to the rest of the world.
d. will not trade in steel.
e. will have a shortage of steel in the domestic market.