The aggregate supply curve normally
a. slopes downward and to the right due to higher resource prices.
b. has a horizontal slope equal to zero.
c. is very steep in the lower portion and flatter in the upper portion.
d. slopes upward to the right due to short-run fixed costs of production.
d
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Ian views playing Wartcraft and drinking soda as perfect complements (one soda with one hour of playing Wartcraft). Currently, sodas are $1 each and Wartcraft costs $1 per hour. Ian has $12 of income
a. Compute Ian's Compensating Variation if the price of Wartcraft rises to $2. b. Compute Ian's Equivalent Variation if the price of Wartcraft rises to $2. c. Compute Ian's change in Consumer Surplus if the price of Wartcraft rises to $2.
Patents stimulate investment
a. by giving inventors an incentive to incur up-front costs of developing new products b. by giving tax breaks to inventors c. by guaranteeing a profit from new products d. by lowering interest rates e. through government payments that cover costs of research and development
When there is a large government deficit, what will happen to the aggregate demand curve?
a. It will shift to the left. b. It will shift downward. c. It will shift to the right. d. It will not shift.
The demand curve for the perfectly competitive industry normally slopes downward, unlike the perfect competitive firm. Why?