A year-long drought that destroys most wheat crops for the season would shift the:
A. short-run aggregate supply curve only.
B. aggregate demand curve only.
C. aggregate demand curve, and the short-run aggregate supply curve would shift in response.
D. short-run aggregate supply curve and the long-run aggregate supply curve.
Answer: A
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Markets
A) facilitate trade. B) allow traders to enjoy gains from trade. C) coordinate price information between buyers and sellers. D) All of the above answers are correct.
In long-run perfectly competitive equilibrium, which of the following is false?
A) There is efficient, low-cost production at the minimum efficient scale. B) Economies of scale are exhausted. C) Economic surplus is maximized. D) Firms earn economic profit.
The rate at which a firm is able to substitute one input for another while keeping the level of output constant is called the
A) marginal rate of technical substitution. B) isoquant substitution rate. C) opportunity cost of inputs. D) input trade-off rate.
Suppose the inflation rate has risen 0.5 percent a year for the past three years. Using this experience an individual forecasts a 0.5 percent rise in the coming year's inflation rate. This is an example of:
a. traditional expectations. b. rational expectations. c. adaptive expectations. d. reflective expectations. e. deductive expectations.