The law of increasing opportunity costs states that:
A. if society wants to produce more of a particular good, it must sacrifice larger and larger
amounts of another good to do so.
B. the sum of the costs of producing a particular good cannot rise above the current market
price of that good.
C. if the sum of the costs of producing a particular good rises by a specified percent, the price
of that good must rise by a greater relative amount.
D. if the prices of all the resources used to produce goods increase, the cost of producing any
particular good will increase at the same rate.
Answer: A
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Explain menu costs and shoe leather costs as they relate to inflation
What will be an ideal response?
The Keynesian AS curve differs from the classical AS curve in that:
a. the classical AS curve assumes flexible nominal wages. b. the Keynesian AS curve is upward sloping. c. the Keynesian AS curve focuses on short-run behavior. d. b and c. e. all of the above.
The excess supply created when governments impose a price floor is:
a. shrinking as the floor rises. b. the difference between the old quantity supplied and new quantity demanded. c. the difference between the new quantity supplied and the old quantity demanded. d. the difference between the new quantity supplied and the new quantity demanded. e. actually efficient because prices are higher for suppliers.
If expectations of inflation are greater than actual inflation, the short-run Phillips curve will eventually shift upward.
Answer the following statement true (T) or false (F)