The short-run aggregate supply curve:
a. has the same slope as the LRAS
b. shifts only when the LRAS shifts in the same direction.
c. normally slopes upward to the right because the costs of labor and other inputs are relatively fixed in the short run.
d. normally has a slope of zero, meaning the curve is horizontal.
c
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After a price floor of $23 is placed on the market in the graph shown, which area represents consumer surplus?
A. A
B. A + B
C. A + B + C
D. A + B + C + D
Suppose the equilibrium level of income exceeds the full employment level of income and there is high inflation. Hence, the government decides to implement a fiscal policy that will act to reduce national output and prices. This can be accomplished by:
a. increasing government spending such that aggregate expenditures are increased. b. raising taxes and government spending by the same amount such that aggregate supply is decreased and aggregate demand is increased. c. decreasing government spending such that aggregate demand is reduced. d. lowering average tax rates such that aggregate supply is increased. e. increasing transfer payments such that aggregate expenditures decline.
Figure (a) represents the domestic demand and supply of televisions. Suppose free trade is allowed and the current world price of televisions is P1 as shown in Figure (b). Now suppose the domestic government imposes a tariff increasing the domestic price to P2 in Figure (b). This tariff will cause
a. imports to fall from Q2 minus Q1 to Q4 minus Q3.
b. domestic producers to increase their production from Q1 to Q3.
c. domestic consumers to reduce their consumption from Q2 to Q4.
d. All of the above.
In Exhibit 10-5, at what wage rate will the firms stop hiring these workers?
A. $25.00. B. $20.00. C. $15.00. D. $10.00.