In the long run, persistent inflation in the United States is caused by
A) leftward shifts in both the long-run aggregate supply curve and in the aggregate demand curve.
B) rightward shifts in the long-run aggregate supply curve and the leftward shift of the aggregate demand curve.
C) a faster rightward shift of the aggregate demand curve than the rightward shift of the long-run aggregate supply curve.
D) leftward shifts in the aggregate demand curve while the position of the long-run supply curve is unchanged.
C
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The law of supply reflects the fact that
A) people buy more of a good when its price falls. B) suppliers have an incentive to use their resources in the way that brings the biggest return. C) the demand curve is downward sloping. D) higher prices are more attractive to consumers because they signal a higher quality product. E) businesses can sell more goods at lower prices.
If the price of a good rises and the consumer's budget remains the same, what happens to the consumer's consumption possibilities?
What will be an ideal response?
An imperfection in the market mechanism that prevents optimal outcomes is called
A. Price leadership. B. Collusion. C. Antitrust behavior. D. Market failure.
Refer to the short-run production and cost data. The curves of Figures A and B suggest that:
A. marginal product and marginal cost reach their maximum points at the same output.
B. marginal cost reaches a minimum where marginal product is at its maximum.
C. marginal cost and marginal product reach their minimum points at the same output.
D. AVC cuts MC at the latter's minimum point.