Search costs can lead to different prices for the same product
Indicate whether the statement is true or false
true
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In the aggregate demand-aggregate supply model, the economy's price level is assumed to be ________.
A. constant, just like in the aggregate expenditures model B. variable, unlike in the aggregate expenditures model C. constant, unlike in the aggregate expenditures model D. variable, just like in the aggregate expenditures model
You are studying with a friend, and your friend says "To maximize utility, a consumer must consume the combination of goods so that the marginal utility of good X equals the marginal utility of good Y
" Explain whether your friend's statement is correct or incorrect.
During 2008, oil price increases
A) did not shift the short-run aggregate supply curve as far to the left as similar increases had 30 years earlier. B) shifted the short-run aggregate supply curve farther to the left than similar increases had 30 years earlier. C) shifted the aggregate demand curve farther to the left than similar increases had 30 years earlier. D) shifted the aggregate demand curve farther to the right than similar increases had 30 years earlier.
If demand is perfectly elastic
A) then a 1% increase in price leads to a fall in quantity of greater than 1%. B) then a 1% increase in price leads to a fall in quantity of less than 1%. C) then a 1% increase in price causes quantity demanded to fall to zero. D) then a 1% increase in price has no effect on quantity demanded.