A price ceiling does all of the following except:
A. Increases the quantity demanded relative to the equilibrium level.
B. Creates excess supply.
C. Creates a market shortage.
D. Decreases the quantity supplied relative to the equilibrium level.
Answer: B. Creates excess supply.
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In the short run ________
A) the more flexible wages and prices are, the more inflation responds to the output gap B) the more sticky wages and prices are, the more difficult to tell the difference between the short run and long run aggregate supply curves C) if wages and prices are sticky, aggregate output is always at its potential level D) all of the above E) none of the above
When money wages rise, the most significant effect on the aggregate supply curve is that it
a. shifts outward. b. shifts inward. c. becomes flatter. d. becomes steeper.
When a firm's long-run average total costs do not vary as output increases, the firm exhibits
a. economies of scale. b. constant returns to scale. c. diseconomies of scale. d. an efficient use of resources.
Shift to the left or right for supply: business taxes increase or subsidaries decrease
What will be an ideal response?