The LRAS curve is ____ with real output levels that ____
a. upward sloping; vary positively with the price level
b. upward sloping; vary negatively with the price level
c. vertical; are equal to the natural level of real output at all price levels
d. vertical; can be either greater than or less than the natural level of real output
c
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A pharmaceutical company faces a price regulation where it cannot charge any higher than $5,000 for a lifesaving drug. The company knows that the patients put a high value on this product and are willing to pay up to $10,000 for it. The company decides to sell the drug together with periodic blood testing for $10,000 . This is an example of
a. Tying b. Bundling c. Fraud, the company is not allowed to sell for any higher than the regulatory pric d. Both A&B
Suppose nominal GDP was $360 billion in 1990 and $450 billion in 2000. The appropriate price index (1985 = 100) was 120 in 1990 and 125 in 2000. Between 1990 and 2000 real GDP:
a) increased by $60 billion. b) decreased by $32 billion. c) increased by $100 billion. d) increased by $117 billion.
If the wage rate doesn't change but a profit-maximizing competitive firm hires fewer workers, we know that
A) the price of the product increased. B) technical change occurred that increased labor productivity, reducing the firm's demand for labor. C) demand for the product fell or there has been a reduction in labor productivity. D) marginal factor cost increased.
If MUx/Px exceeds MUy/Py, then a household can increase its utility by spending more on X and less on Y.
Answer the following statement true (T) or false (F)