Assume that all firms in this industry have identical cost curves, and that the market is perfectly competitive.
If the market supply curve is given by S3, then what will happen to the market supply curve in the long run?
A. It will shift to S1.
B. It will shift to S2.
C. It will stay at S3, but the quantity supplied will increase.
D. It will stay at S3, but the quantity supplied will decrease.
Answer: B
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Jack Nelson, a supervisor in the hardware department at Sears, received a $3,000 increase in his annual disposable income. Suppose his marginal propensity to consume is 0.80. How much of the $3,000 increase will Jack spend on consumption?
A) $3,000 B) $2,750 C) $2,200 D) $2,400 E) $2,500
A unit of account
A) is a type of accounting of how many currency units there are in an economy. B) is an accounting of the total units of goods and services produced in an economy. C) is an agreed measure for stating the prices of goods and services in an economy. D) is a type of value stored within all assets.
Why do economists care about aggregate expenditures?
What will be an ideal response?
According to Keynesians, an increase in the money supply will have its greatest impact on GDP when the aggregate demand curve intersects:
A. the vertical portion of the aggregate supply curve. B. the upward sloping portion of the aggregate supply curve. C. the horizontal portion of the aggregate supply curve. D. either the upward sloping or the vertical portions of the aggregate supply curve.