Which of the following would result if the price level were below the equilibrium level?
A. Aggregate supply would decrease.
B. Aggregate demand would increase.
C. Shortages would force sellers to lower prices in order to increase aggregate quantity demanded.
D. Consumers would bid prices up by competing for goods currently in shortage.
Answer: D
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Suppose that when a firm increases output by 50%, long-run total cost increases by less than 50%. The firm will experience
A. decreasing marginal rate of technical substitution. B. economies of scale C. diminishing marginal returns. D. diseconomies of scale
If a natural disaster were to cause a negative long-run supply shock to the economy, once the economy adjusts, the new equilibrium will be at a:
A. higher price level and lower level of output. B. lower price level and lower level of output. C. higher price level and higher level of output. D. lower price level and higher level of output.
Angie's list now provides a rating service for physicians. This type of information can potentially help consumers in which stage of the consumer decision making process?
External search Post purchase evaluation Problem recognition Internal search
Average variable cost is at a minimum when ______
A. marginal cost equals average variable cost B. average total cost is at a minimum C. marginal cost exceeds average fixed cost D. average total cost exceeds average variable cost