The new classical approach to the aggregate supply curve assumes that businesses are
A) better informed about the general price level than they are about prices in their own markets.
B) better informed about prices in their own markets than they are about the general price level.
C) equally well informed about prices in their own markets and the general price level.
D) reluctant to engage in investment spending because of a lack of information concerning future prices.
B
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Price floors are designed to
A) establish a minimum allowable price. B) allow free market prices to be achieved. C) create shortages where none existed before. D) none of the above.
In perfectly competitive markets, firms operate where MC = MR and because of this, they are not making any economic profit.
Answer the following statement true (T) or false (F)
Which of these is true of the expected price level in a labor market? a. It is the equilibrium price level in the short run
b. It determines the actual price level in the short run. c. It determines the actual price level in the long run. d. It allows firms and resource owners to make long-term wage agreements. e. The difference between the expected and actual price levels is equal to the actual inflation rate.
Which of the following changes would not shift the demand curve for a good or service?
a. a change in income b. a change in the price of the good or service c. a change in expectations about the future price of the good or service d. a change in the price of a related good or service