If aggregate supply is vertical, what role does aggregate demand play in determining output? In determining the price level?
What will be an ideal response?
If aggregate supply is vertical, aggregate demand does not affect the quantity of output. However, aggregate demand does affect the price level if aggregate supply is vertical. Shifts in the aggregate demand curve will move the equilibrium point along the vertical aggregate supply curve, thus only changing the price level.
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Lower wages for women relative to those for men constitute wage discrimination if women earn lower wages:
A. but are equally productive. B. and have lower productivity than men. C. in clerical and service occupations. D. due to career interruptions to raise children.
A production function of the form Q = 150L.75 K.50exhibits ________ in the long run.
A. diminishing returns to the variable input B. increasing returns to scale C. constant returns to scale D. decreasing returns to scale
When underproduction occurs,
A) producers gain more surplus at the expense of consumers. B) marginal cost is greater than marginal benefit. C) consumer surplus increases to a harmful amount. D) there is a deadweight loss that is borne by the entire society. E) the deadweight loss harms only consumers.
What economic conditions are relevant in managerial decision making?
What will be an ideal response?