Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as 
A. long-run aggregate supply shifting leftward
B. Short-run aggregate supply shifting upward
C. Short-run aggregate supply shifting downward
D. Aggregate demand shifting leftward
Answer: B
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Suppose that Mel (who is 27 ) is not working, but looked for a job as recently as 2 months ago. Mel would like a job and he is available for work. He is considered
A) unemployed. B) a member of the labor force and unemployed. C) a member of the labor force, but not unemployed. D) a member of the working-age population E) a marginally attached worker.
A surplus will occur in a market if:
A. the quantity supplied at a given price exceeds the quantity demanded at that price. B. the quantity demanded at a given price is less than the quantity supplied at that price. C. there are not enough sellers at the prevailing price. D. there are too many buyers at the prevailing price.
The firm would have a better bargaining position if
a. The firm can easily replace the workers with machinery b. The workers are a critical part of the production process c. The workers are highly specialized and would not find employment elsewhere easily d. Both A&C
Refer to Exhibit 2.7, which shows the production possibilities frontier for capital goods and consumer goods. Identify the correct statement.
a. If the economy is initially at point b, an increase in capital stock will lead to a movement to point c. b. If the economy is initially at point c, an increase in capital stock will lead to a movement to point b. c. Economic growth will allow the economy to produce at a point that lies on a higher production possibilities frontier. d. Economic growth will allow the economy to produce at a point that lies on a lower production possibilities frontier. e. If the economy is initially at point a, an improvement in the rules of the game will lead to a movement to point c.