When production costs fall,
a) the aggregate-demand curve shifts to the right.
b) the short-run aggregate-supply curve shifts to the right.
c) the short-run aggregate-supply curve shifts to the left.
d) the aggregate-demand curve shifts to the left.
Ans: b) the short-run aggregate-supply curve shifts to the right.
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A consumer price index of 110 for a given year indicates that prices in that year are 10 percent higher than prices in the base year
a. True b. False Indicate whether the statement is true or false
Which of the following best describes the idea of excess capacity in monopolistic competition?
a. Firms produce more output than is socially desirable. b. The output produced by a typical firm is less than what would occur at the minimum point on its ATC curve. c. Due to product differentiation, firms choose output levels at which P > ATC. d. Firms keep some surplus output on hand in case there is a shift in demand for their product. e. The collective output of all firms in the market typically exceeds the quantity demanded.
Figure 3-16
Refer to . When the price falls from P2 to P1, producer surplus
a.
decreases by an amount equal to C.
b.
decreases by an amount equal to A + B.
c.
decreases by an amount equal to A + C.
d.
increases by an amount equal to A + B.
Which of the following will increase the level of human capital in an economy?
A. An increase in land mass. B. A decrease in the population. C. An increase in literacy rates. D. An increase in factory capacity.