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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Ceteris paribus, in a closed economy, if consumers become more pessimistic ________
A) autonomous consumption will fall B) investment will fall C) saving will increase D) all of the above E) none of the above
The excess burden of taxation will _____ when the demand curve is more elastic
a. not change b. be higher c. be lower d. be zero
When the ownership of the different stages of production of a commodity lies with different individuals, it becomes difficult to take decisions on capacity expansion because of all the following reasons, EXCEPT:
a. differences in attitudes toward risk. b. differences in motivation. c. different degrees of risk exposure. d. different abilities to hedge themselves.
A utility-maximizing consumer would not consume more of a good if
a. marginal utility increases as more is consumed b. total utility diminishes as more is consumed c. MU/P < 1 d. MU/P < 1 e. MU/P = 1