An increase in the price level
A) shifts the short-run aggregate supply curve up and to the left.
B) shifts the short-run aggregate supply curve down and to the right.
C) shifts the long-run aggregate supply curve to the left.
D) results in a movement along the short-run aggregate supply curve, rather than a shift in the short-run aggregate supply curve.
D
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Production possibilities frontiers usually curve out and away from the origin. The implication of this curvature is that
A) as resources are used to produce one good, fewer resources are available to produce another good. B) technological change is present. C) the opportunity cost of producing a good stays the same regardless of how much of that good is produced. D) some resources are better at producing one good while other resources are better at producing alternative goods. E) the opportunity cost of producing a good goes down as more of that good is produced.
In the above figure, if D2 is the original demand curve and the price of a substitute in consumption rises, which price and quantity might result?
A) point a, with price P2 and quantity Q2 B) point b, with price P1 and quantity Q1 C) point c, with price P3 and quantity Q3 D) point d, with price P1 and quantity Q3
Movements up along a particular short run Phillips curve are not consistent with: a. Increases in aggregate demand
b. Movements up along the short run aggregate supply curve. c. Shifting inflationary expectations. d. Movements up along a particular short run Phillips curve are consistent with all of the above.
If a firm is a perfect competitor, then
A) the demand curve for its product is perfectly elastic. B) it can independently set the price of the product it sells without regard to what other firms in the market are doing. C) it is impossible for the firm to earn short-run economic profits. D) its marginal cost will exceed marginal revenue at the optimal level of output.