The law of supply states that an increase in the price of a good
a. decreases the demand for that good
b. decreases the quantity demanded for that good
c. increases the supply of that good.
d. increases the quantity supplied of that good.
e. does none of the above
d. increases the quantity supplied of that good.
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Marginal fixed costs decrease as output increases.
Answer the following statement true (T) or false (F)
If an unanticipated increase in aggregate demand results in an output beyond the economy's long-run capacity, long-run equilibrium will eventually be restored by
a. an increase in the economy's productive capacity (LRAS shifts to the right). b. higher resource prices, an increase in SRAS, and a decrease in the general level of prices. c. higher resource prices, a decrease in SRAS, and an increase in the general level of prices. d. a decrease in the natural rate of unemployment.
Suppose a tax of $3 per unit is imposed on a good. The supply curve is a typical upward-sloping straight line, and the demand curve is a typical downward-sloping straight line. The tax decreases consumer surplus by $3,900 and decreases producer surplus by $3,000 . The tax generates tax revenue of $6,000 . The tax decreased the equilibrium quantity of the good from
a. 2,000 to 1,500. b. 2,400 to 2,000. c. 2,600 to 2,000. d. 3,000 to 2,400.
Leaders that give the group total freedom
a. autocratic b. laissez-faire c. democratic d. trait