The data in the above table show that when the price level is 120, if aggregate demand does not change then the
A) money wage rate will rise in the future.
B) money wage rate will fall in the future.
C) short-run aggregate supply curve will shift leftward.
D) long-run aggregate supply curve will shift leftward.
B
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There are only two goods for John to consume: food and clothing. If clothing is an inferior good for John when his income rises to $100,000, then food is
A) also an inferior good. B) a normal good. C) Either inferior or normal could be possible. D) Not enough information
Goods X and Y are complementary goods. A decrease in price of good X has occurred. In the market for good Y, this will lead to
A) an increase in price and a decrease in quantity. B) an increase in price and an increase in quantity. C) a decrease in price and a decrease in quantity. D) a decrease in price and an increase in quantity.
Whenever firms can freely enter and exit a market,
a. firms can never earn a profit. b. prices will be the same for all firms in the market. c. products will be identical for all firms in the market. d. profits and losses play an important role in determining the size of the industry.
Why are long-run costs always less than or equal to short-run costs?
a. In the long run, technological change can occur, leading to lower costs over time. This means that long-run costs will always be less than or equal to short-run costs at the same level of output. b. In the long run, employees are more productive so the firm's costs will be lower. This means that long-run costs will always be less than or equal to short-run costs at the same level of output. c. In the long run, all inputs are flexible so the firm can minimize all costs. This means that long-run costs will always be less than or equal to short-run costs at the same level of output. d. In the long run, firms can choose how much output to produce based on demand, which will lead to lower costs. This means that long-run costs will always be less than or equal to short-run costs at the same level of output.