Exhibit 14A-1 Aggregate demand and supply model
?Beginning from short-run equilibrium at point E2 in Exhibit 10A-1, the economy's movement to a new position of long-run equilibrium would best be described as:
A. ?a movement along the AD2 curve with a shift in the SRAS1 curve.
B. ?a movement along the SRAS2 curve with a shift in the AD2 curve.
C. ? a shift in the LRAS curve to an intersection at E1.
D. ?no shift of any kind.
Answer: A
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The figure above illustrates the marginal private cost and the marginal social cost to the city of Seattle for each rock concert that is offered. It also illustrates the marginal private benefit. There is no external benefit
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What will be an ideal response?
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