What are two underlying factors affecting input prices? How does a change in input prices affect aggregate supply?
What will be an ideal response?
Included as factors behind changes in input prices are the prices of domestic resources and the prices of imported resources. If domestic prices fall or the prices of imported resources fall, then input prices will fall. A decline in input prices will likely increase aggregate supply. If domestic prices rise or the prices of imported resources rise, then input prices will rise. An increase in input prices will likely decrease aggregate supply.
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The Keynesian AD curve differs from the classical AD curve in that:
a. the classical AD curve can shift in response to non-monetary shocks. b. the Keynesian AD curve can shift in response to monetary shocks. c. the Keynesian AD curve can shift in response to non-monetary shocks. d. there is no difference, both are determined by the quantity theory. e. none of the above.
Which feature of a market would contribute most to overall social welfare?
a. Low prices and high outputs b. Reduction in costs due to technological improvements c. The invention of new products d. Difficult to weigh a, b, and c without further information about society's preferences
The amount that a seller is paid for a good minus the seller’s actual cost is called:
a. producer surplus. b. consumer surplus. c. total surplus. d. demand surplus.
A characteristic of a competitive labor market is
A. an equilibrium wage and quantity supplied. B. an overall reduction in employment due to firms having market power. C. high levels of unemployment. D. labor supply changing as the wage changes.