If workers always see inflation coming, and if they demand wage increases in advance so that inflation does not erode real wages, then the economy's aggregate supply curve on the AD-AS diagram will
a. be a vertical line corresponding to potential GDP.
b. be a horizontal line corresponding to potential GDP.
c. slope downward.
d. slope upward.
a
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The difference between positive economic statements and normative economic statements is that
a. positive statements are based on opinion while normative statements are based on fact b. positive statements are true and normative statements are often false c. positive statements are often false and normative statements are true d. positive statements are based on fact while normative statements are based on opinion e. both b and d.
An industry is said to be a natural monopoly when
a. legal barriers limit entry into the market. b. diseconomies of scale are present in the market. c. the market demand for the product supplied by a firm is inelastic. d. long-run ATC continues to decline as firm size increases. e. larger firms have higher per-unit costs than their smaller rivals.
Why does consumer surplus decrease when price increases?
A. Consumers buy less of the good at a higher price. B. Producers cannot sell as much to the consumer. C. Consumers buy less of the good at a lower price. D. Consumers buy more of the good at a higher price.
Using Figure 1.6, we know the production of 90 units of soda and 4 units of pizza is 
A. possible, but only if all resources were fully employed. B. impossible because we either do not have the resources or the technology. C. undesirable. D. possible, but there would be unemployed resources.