The long-run aggregate supply curve would shift right if the government were to
a. reduce the minimum-wage.
b. make unemployment benefits more generous.
c. raise taxes on investment spending.
d. All of the above are correct.
Ans: a. reduce the minimum-wage.
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If the value of a nation's merchandise exports exceeds merchandise imports, the nation is running a
a. capital account deficit. b. capital account surplus. c. balance of trade surplus. d. balance of trade deficit.
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y2. C. P3 and Y1. D. P2 and Y3.
Doggy Treats is selling dog treats in a purely competitive market. Its output is 800 treats, which it sells for $10 a treat. At the 800-treat level of output, the marginal cost is $11, the average variable cost is $9.00, and the average variable cost is
$8.00. Should the firm increase output, decrease output, or not produce? Why? How should the firm determine that optimal level of output? What will be an ideal response?
Assume Robbie's Robots operates in a perfectly competitive market producing 3,000 robots per day. At this output level, the selling price is $800 per robot and the marginal cost is $625 per robot. It follows that producing one more robot will cause this firm's
A. profits to remain unchanged. B. total cost to decrease. C. profits to increase. D. profits to decrease.