Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the short run would be:
A. P4 and Y2.
B. P4 and Y1.
C. P1 and Y1.
D. P3 and Y1.
Answer: B
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Farmers selling some of their soybeans in storage because they anticipate a lower price of soybeans in the near future would cause a
A. movement up along the current supply curve of soybeans. B. rightward shift in the current supply of soybeans. C. movement down along the current supply curve of soybeans. D. leftward shift in the current supply of soybeans.
When every good or service is produced up to the point where the last unit provides ________, allocative efficiency occurs
A) a marginal benefit to society greater than the marginal cost of producing it B) a marginal benefit to society equal to the marginal cost of producing it C) a marginal benefit to society less than the marginal cost of producing it D) a marginal benefit to society equal to zero
If a profit maximizing monopolist sells output for $100, then we know that its marginal revenue is
A. more than $100 if it is a perfect price discriminator. B. less than $100 if it is a perfect price discriminator. C. equal to $100 in all cases. D. less than $100 if it is a single price monopolist.
The vertical slope of the long-run aggregate supply curve is based on the assumption that:
A. nominal wages and other resource costs do respond to price level changes. B. nominal wages are greater than real wages. C. nominal wages are less than real wages. D. nominal wages and other resource costs do not respond to price level changes.