Question : A perfectly elastic demand curve is:
Option 1: Horizontal.
Option 2: Vertical.
Option 3: Upward-sloping.
Option 4: Downward-sloping.
Correct Answer: Horizontal.
Solution : The correct answer is (a) Horizontal.
A perfectly elastic demand curve is represented by a horizontal line. It means that even a slight change in price will result in an infinite change in quantity demanded. In other words, consumers are extremely responsive to changes in price, and they will only purchase the good or service at a specific price. As a result, the quantity demanded can change significantly without any change in price.
Question : The demand curve facing a perfectly competitive firm:
Option 1: downward sloping
Option 2: perfectly inelastic
Option 3: a concave curve
Option 4: perfectly elastic
Question : In the long run, the aggregate supply curve is:
Option 1: Vertical
Option 2: Horizontal
Option 3: Upward-sloping
Option 4: Downward-sloping
Question : The long-run Phillips curve is:
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