Suppose that the productivity used to produce computers advances. How does this change affect the supply of computers and the supply curve of computers?
What will be an ideal response?
An advance in productivity increases the supply of computers. Hence increases in productivity shift the supply curve of computers rightward.
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If all prices, including the price of beef, increase by 3%, then the relative price of beef has ________ and inflation ________.
A. remained constant; has not occurred B. remained constant; has occurred C. increased; has not occurred D. increased; has occurred
Refer to Figure 8.2. As the competitive industry, not just the firm in question, moves toward long-run equilibrium, what will the price be?
A) $60 B) $64 C) $70 D) $71 E) $80
A price index:
A. summarizes the changes in the cost of living for only rural consumers. B. measures how much the cost of a market basket has risen or fallen relative to the cost in a base time period. C. is generally only used with consumer goods and services D. allows us to see clearly the changes in the cost of a market basket daily.
Refer to the graph shown. A movement from D to B is most likely to be caused by:
A. a decrease in input prices. B. a decrease in import prices. C. a decrease in aggregate demand. D. an increase in expected inflation.