Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward
B. Short-run aggregate supply shifting downward
C. Aggregate demand shifting rightward
D. Aggregate demand shifting leftward
Answer: B
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Tom Searchinger, a senior attorney at the Environmental Defense Fund, observed that generous farm subsidies have encouraged farmers to produce more corn and more wheat. How does this affect the market for fertilizer?
A) The supply of fertilizer increases. B) The demand for fertilizer increases. C) The supply of fertilizer decreases. D) The demand for fertilizer decreases.
The above figure shows the market demand curve for telecommunication while driving one's car (time spent on the car phone). The current price is 35ยข per minute. What is the consumer surplus at the current price?
A) 924.5 B) 1075 C) 301 D) 1250
Average costs _______initially due to the presence of fixed costs and then rise due to _________
a. fall; decreasing marginal costs b. fall ; increasing marginal costs c. rise; decreasing fixed costs d. rise; increasing fixed costs
An increase in labor supply will increase the equilibrium wage rate
a. True b. False