Both short and long-run aggregate supply curves can shift to the right if entrepreneurial activities lower costs of production and expand what can be produced
a. True
b. False
Indicate whether the statement is true or false
True
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The above figure shows the market for french fries at fast food joints. If the price of potatoes rises and simultaneously people become concerned that french fries can cause heart attacks the
A) demand curve for french fries shifts from D2 to D1 and the supply curve of french fries does not shift. B) demand curve for french fries shifts from D2 to D1 and the supply curve of french fries shifts from S2 to S1. C) demand curve for french fries shifts from D2 to D1 and the supply curve of french fries shifts from S1 to S2. D) demand curve for french fries does not shift, and the supply curve of french fries shifts from S1 to S2.
An example of expansionary fiscal policy would be
A) a decrease in government spending to reduce budget deficits. B) an increase in tax collection to reduce budget deficits. C) a decrease in interest rates to help stimulate the economy. D) an increase in government spending on infrastructure to create jobs and improve the economy. E) an increase in interest rates to encourage private savings.
Given the information in the table above, if the world equilibrium price of widgets were 4 cloth, then
A) both countries could benefit from trade with each other. B) neither country could benefit from trade with each other. C) each country will want to export the good in which it enjoys comparative advantage. D) neither country will want to export the good in which it enjoys comparative advantage. E) both countries will want to specialize in cloth.
Explain why a monopolist must lower its quantity relative to a competitive market to maximize its profits.
What will be an ideal response?