Suppose that a small economy that produces mostly agricultural goods experiences a year with exceptionally good conditions for growing crops. The good weather would
a. shift both the short-run aggregate supply and the short-run Phillips curve right.
b. shift both the short-run aggregate supply and the short-run Phillips curve left.
c. shift the short-run aggregate supply curve to the right, and the short-run Phillips curve to the left.
d. shift the short-run aggregate supply curve to the left, and the short-run Phillips curve to the right.
c
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Which of the following statements about a production function is correct for a firm that uses labor to produce output?
a. The production function depicts the relationship between the quantity of labor and the quantity of output. b. The slope of the production function measures marginal product. c. The slopes of the production function and the total cost curve are inversely related; if one is increasing, the other is decreasing. d. All of the above are correct.
If the price of the output produced by a particular type of labor decreases, which of the following shifts should occur in the labor market for the particular type of labor?
A. Demand for labor should shift to the right. B. Supply of labor should shift to the right. C. Demand for labor should shift to the left. D. Supply of labor should shift to the left.
A firm finds that at its MR = MC output, its TC = $1,000, TVC = $800, TFC = $200, and total revenue is $900. This firm should:
A. shut down in the short run. B. produce because the resulting loss is less than its TFC. C. produce because it will realize an economic profit. D. liquidate its assets and go out of business.
Which of the following is a characteristic of economics?
A. the way society deals with people's needs B. the focus on how people behave not in their own self-interest C. allocation of limited resources in an effort to satisfy potentially unlimited wants D. all of these