Explain the way an increase in supply with demand remaining constant and a decrease in supply with demand remaining constant are different.
What will be an ideal response?
If the supply of a good increases, with the demand remaining constant, a surplus for this good will develop. As a result, sellers will compete to sell the surplus by reducing price. As the price falls, the quantity demanded increases until quantity supplied and quantity demanded are equal again at the new equilibrium quantity. However, if the supply of a good decreases, with the demand remaining constant, a shortage for this good will develop. As a result, buyers compete to buy the good, thereby forcing up the price. As the price increases, the quantity demanded decreases until the quantity demanded and quantity supplied are equal again at the new equilibrium quantity.
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Can consumption efficiency be achieved even if the efficient product mix is not achieved?
What will be an ideal response?
Explain what economists mean when they apply the rationality assumption
What will be an ideal response?
The advantages of the U-Form of firm organization is
a. workers develop a high degree of functional expertise b. information can be easily shared between similarly trained employees within units c. evaluating employees is easier because managers typically are similarly trained d. all of the above
The amount of additional aggregate demand needed to achieve full employment after allowing for price level changes is
A. The inflationary GDP gap. B. The AD excess. C. The recessionary GDP gap. D. The AD shortfall.