Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________, 
A. Rising; B; C
B. Falling; A; C
C. Falling; A; B
D. Rising; A; C
Answer: D
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If firms in an oligopolistic industry consistently cut their price to sell more output, what price and output will result?
A) the monopoly price and output B) the competitive price and output C) the monopolistically competitive price and output D) a price lower than the competitive price and less output than the competitive amount E) a price lower than the competitive price and more output than the competitive amount
Positive externalities are created when
A) other consumers reduce their demand for coffee and price thereby declines. B) farmers spray pesticide in their fields and it washes into the local river after the first rainstorm. C) your neighbor plants beautiful trees and flowers in her yard. D) you purchase the "Mona Lisa" and lock it in a vault.
When the wage rate rises, a worker is better off and thus chooses to have more leisure and more consumption. This phenomenon is known as
a. compensating differential. b. the income effect. c. the substitution effect. d. intertemporal substitution.
If a consumer reallocates his or her spending away from Good A and towards Good B, then the consumer's total utility will increase if:
A. MUA/PA < 0 and MUB/PB < 0. B. MUA/PA < MUB/PB. C. MUA/PA > MUB/PB. D. MUA/PA > 0 and MUB/PB > 0.