Dr. D. is a critic of standard microeconomic analysis. In one of his frequent tirades, he was heard to say, ‘‘Take the argument for upward-sloping, long-run supply curves. This is a circular argument if I ever heard one. Long-run supply curves are said to be upward sloping because input prices rise when firms hire more of them. And that occurs because the long-run supply curves for these inputs are upward sloping. Hence, the argument boils down to ‘long-run supply curves are upward sloping because other supply curves are upward sloping.’ What nonsense!’’ Does Dr. D. have a point? Explain clearly
Dr. D. is a critic of standard microeconomic analysis. In one of his frequent tirades, he was heard to say, ‘‘Take the argument for upward-sloping, long-run supply curves. This is a circular argument if I ever heard one. Long-run supply curves are said to be upward sloping because input prices rise when firms hire more of them. And that occurs because the long-run supply curves for these inputs are upward sloping. Hence, the argument boils down to ‘long-run supply curves are upward sloping because other supply curves are upward sloping.’ What nonsense!’’ Does Dr. D. have a point? Explain clearly
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Dr. D. is a critic of standard
In one of his frequent tirades, he was heard to
say, ‘‘Take the argument for upward-sloping,
long-run supply
if I ever heard one. Long-run supply curves are
said to be upward sloping because input
rise when firms hire more of them. And that occurs
because the long-run supply curves for these
inputs are upward sloping. Hence, the argument
boils down to ‘long-run supply curves are upward
sloping because other supply curves are upward
sloping.’ What nonsense!’’ Does Dr. D. have a
point? Explain clearly.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education