Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as 
A. long-run aggregate supply shifting leftward
B. Short-run aggregate supply shifting upward
C. Short-run aggregate supply shifting downward
D. Aggregate demand shifting leftward
Answer: B
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The excess capacity theorem states that society would clearly benefit from a reduction in the number of monopolistic competitors.
Answer the following statement true (T) or false (F)
Simply asking people how much they value a highway is not a reliable way of measuring the benefits and costs because
a. those who stand to gain have an incentive to tell the truth. b. those who stand to lose have an incentive to exaggerate their true costs. c. answers to the survey questions will always be downwardly biased. d. not everyone asked will be using the highway.
A surplus exists
A. when quantity supplied is greater than quantity demanded. B. in equilibrium. C. when quantity supplied is less that quantity demanded. D. at the market clearing price.
A good for which demand decreases when income decreases is known as a(n) ________ good
A) normal B) inferior C) complementary D) substitute