The equilibrium price level
a. determines by how much the AD curve shifts
b. is inversely related to the nominal wage rate
c. is influenced by the pricing behavior of all the firms in the economy
d. is unaffected by changes in resource costs
e. is the same thing as the interest rate
C
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If Tom can wax a car in fewer hours than Jerry, then Tom definitely has
A) a comparative advantage in car waxing. B) an absolute advantage in car waxing. C) both a comparative and an absolute advantage in car waxing. D) neither a comparative nor an absolute advantage in car waxing. E) an undetermined advantage because we do not know how long it takes Tom and Jerry to wash a car.
If the quantity supplied increases by 8 percent when the price rises by 2 percent, the price elasticity of supply is ________
A) 10.0 B) 6.0 C) 0.25 D) 16.0 E) 4.0
The above figure shows the marginal social benefit, marginal private cost and marginal social cost of producing steel. If the market is competitive, what government policy might move the market closer to efficiency?
A) The government could subsidize the production of steel. B) The government could tax the production of steel. C) The government could issue vouchers to steel consumers. D) None of the above answers is correct.
A firm in a perfectly competitive industry
a. is unaffected by the entrance of new firms into the industry, since entering firms affect only the prices they themselves receive. b. always produces more output in the long run than in the short run. c. may choose a different output in the long run than in the short run. d. earns economic profit in the long run but not in the short run.