At price P3in Figure 4-21, what will tend to happen?
A. There will be a shortage, and the price will fall.
B. There will be a shortage, and the price will rise.
C. There will be a surplus, and the price will rise.
D. There will be a surplus, and the price will fall.
E. Equilibrium will occur in the market.
Answer: B
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Discuss the aggregate production function. How does the aggregate production function relate to the labor market and potential GDP?
What will be an ideal response?
Everything else equal, the AC curve will shift downward if
a. input prices rise. b. input MPPs rise. c. output rises. d. output falls.
When there is a shortage
A. quantity demanded is greater than quantity supplied. B. quantity supplied is greater than quantity demanded. C. quantity demanded is equal to quantity supplied.
A change in price changes the quantity demanded and is represented by a movement along the demand curve.
Answer the following statement true (T) or false (F)