The long-run supply curve for a firm in a perfectly competitive industry is:
A) negatively sloped.
B) positively sloped.
C) vertical.
D) horizontal.
D
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Which of the following would cause the aggregate demand curve to decrease, ceteris paribus?
a) An increase in income taxes. b) An increase in the value of the stock market. c) Strong performance of foreign economies. d) A decrease in interest rates.
The power of the supply and demand model lies in its ability
A) to generally predict how price and quantity will change with supply and demand shocks. B) to precisely predict the impact of government regulations on quantity and price. C) to precisely determine the difference between price ceilings and price floors. D) to generally predict how profit motive impacts the distribution of goods and services.
Suppose that when the price of aspirin rises from $2 to $3 per bottle, the quantity demanded falls from 800 bottles per day to 700 bottles per day. Over this range, the demand for aspirin is
a. elastic b. unitary elastic c. perfectly elastic d. inelastic e. perfectly inelastic
Suppose the natural rate of unemployment is 4 percent. What is the actual rate of unemployment if actual output is 2 percent below potential output?
A. 8 percent B. 5 percent C. 6 percent D. 3 percent