A positive temporary supply side shock will:
A. increase the level of potential output in the long run.
B. decrease the price level in the long run.
C. increase the price level in the long run.
D. have no effect in the long run.
Answer: D
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"If Bill's income increases from $80,000 per year to $91,000 per year and he consumes pickup trucks and lamb chops with his money, Bill's budget line shifts outward and the increase in income means he can consume more trucks and more lamb
" Is this statement true or false? Briefly explain your answer.
The quality of a product
A) is usually unknown to the seller and the buyer. B) leads to adverse selection. C) creates noise in a market. D) is a hidden characteristic.
If a monopsonist offers a wage of $6, he finds that 1,200 people are willing to work for him. This means that the:
a. marginal factor cost is $6. b. marginal factor cost is $200. c. total wage cost is $1,200. d. total wage cost is $7,200. e. $6 wage is too high.
How do workers typically express self-interest?
A. By minimizing the economic losses of other business firms. B. By maximizing the economic profits of other business firms. C. By seeking jobs with the best combination of wages and benefits. D. By seeking the highest price when purchasing a consumer product.