In the aggregate demand–aggregate supply model, which of these changes is most likely when the cost of production increases in the long run?
a. A leftward shift of the short-run aggregate supply curve
b. A leftward shift of the short-run aggregate demand curve
c. A rightward shift of the short-run aggregate supply curve
d. An increase in the potential output level increases
e. A decrease in the actual price level decreases.
a
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The explicit cost of production is also called
A) accounting cost. B) overhead cost. C) direct cost. D) variable cost.
Suppose the typical consumer only purchases food and clothing, and her utility can be expressed as U = F ? C. Currently, food costs $5 per unit and clothing costs $2 per unit. Her income is $70
If the price of food increases to $6, compare the resulting Laspeyres price index with a true cost of living index.
A copper mining firm has discovered that there is gold mixed in with its copper ore. Since the marginal cost of mining the gold is negligible, they are willing to sell it at the current market price of $500 an ounce. If the rate of interest is 5%, the firm should expect the price next year
a. to rise to $505. b. to rise to $525. c. to rise to over $525. d. to remain constant.
As manufacturing becomes more efficient, services can be expected to become more costly.
Answer the following statement true (T) or false (F)