Refer to Figure 11.1. Assume the economy is in equilibrium at 1 = 0. Other things equal, an unexpected large increase in the price of oil will result in a movement from point ________ to point ________
A) A; B
B) B; A
C) A; C
D) A; D
B
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Define the aggregate production function. Discuss why the aggregate production function exhibits diminishing returns
What will be an ideal response?
If the aggregate demand curve shifts ________ faster than the long-run aggregate supply curve, then ________ occurs
A) leftward; economic growth B) leftward; inflation C) rightward; economic growth D) rightward; inflation
Assume there is a simultaneous decrease in the cost of batteries used in hybrid cars and a shift in consumer preferences toward more fuel-efficient vehicles
Based on this, we can conclude, with certainty, that in the market for hybrid cars, equilibrium: A) price will decrease. B) price will increase. C) quantity will decrease. D) quantity will increase.
Which of the following would shift the supply curve for a good to the left?
a. an increase in the price of that good b. a decrease in the price of an alternative good c. an improvement in technology for producing that good d. an increase in the cost of an important resource used to make that good e. an increase in the number of producers