Past expenses are irrelevant to supply decisions because
What will be an ideal response?
supply decisions depend on opportunities that will have to be forgone, not opportunities
already forgone.
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Which of the following statements is true?
A) An increase in potential GDP increases aggregate supply and shifts the AS curve leftward. B) A decrease in potential GDP decreases aggregate supply and shifts the AS curve leftward. C) An increase in the money wage rate shifts the AS curve rightward. D) A fall in the price level shifts the AS curve leftward. E) An increase in the money wage rate increases potential GDP.
The above figure shows Bobby's indifference map for juice and snacks. Also shown are three budget lines resulting from different prices for snacks. Bobby's demand for snacks is
A) unit elastic. B) elastic. C) inelastic. D) perfectly elastic.
If aggregate demand increases and aggregate supply decreases, the price level:
A. will decrease, but real output may increase, decrease, or remain unchanged. B. will increase, but real output may increase, decrease, or remain unchanged. C. and real output will both increase. D. and real output will both decrease.
Based on the table above which shows Chip's costs, if rice sells for $600 a ton, Chip's profit-maximizing output is
A) less than one ton. B) between two and three tons. C) between three and four tons. D) between one and two tons.