If the actual price level is less than the expected price level reflected in long-term contracts, _____
a. firms will find production more profitable in the short run than they had expected and will decrease the quantity of output supplied
b. firms will find production less profitable in the short run than they had expected and will decrease the quantity of output supplied
c. firms will find production more profitable in the short run than they had expected and will increase the quantity of output supplied
d. resource owners will earn higher returns in the short run than they had expected and will decrease the quantity of resources supplied
e. unemployment will increase in the short run as firms will substitute labor with capital inputs
b
You might also like to view...
Refer to Figure 1.7. Which of the following points are unattainable, ceteris paribus?
A. G. B. F. C. E. D. N.
The principle of comparative advantage states that countries should specialize in the production of goods for which they have a lower opportunity cost of production than their trading partners.
Answer the following statement true (T) or false (F)
Because people can enjoy the benefits of public goods whether they pay for them or not, they are usually unwilling to pay for them. This is known as the
A. nonexcludable problem. B. free-rider problem. C. drop-in-the-bucket problem. D. nonrival problem.
If the production possibilities frontiers shown are each for one day of production, then which of the following combinations of tacos and burritos could Arturo and Dina together produce in a given day
A. 400 tacos and 350 burritos B. 600 tacos and 150 burritos C. 700 tacos and 100 burritos D. 500 tacos and 250 burritos