Long run aggregate supply is vertical, while short run AS is not because:in the short run, prices cannot change as quickly as they shouldin the long run, prices are constantin the long run, prices catch up to wage increasesO in the long run, increases in prices are matched by increases in wages

Aggregate supply refers to the overall quantity of the goods and service that an economy produced in…

Long run aggregate supply is vertical, while short run AS is not because: O in the short run, prices cannot change as quickly as they should O in the long run, prices are constant in the long run, prices catch up to wage increases in the long run, increases in prices are matched by increases in wages

Long run aggregate supply is vertical, while short run AS is not because: O in the short run, prices cannot change as quickly as they should O in the long run, prices are constant in the long run, prices catch up to wage increases in the long run, increases in prices are matched by increases in wages

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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PART 2 Question 1 a. The following table summarizes the short-run production functions for "All Needs Firms". The product of “All Needs Firm" sells for 5 GHC per unit, the cost of input X1 is 8 GHC per unit, and the price of input X2 is 25 GHC per unit. Complete the following table, and then answer the associated questions. Please show how you arrive at your answers. X1 X2 Q MPx1 APr1 AP2 1. 5 10 2 30 3 5 60 4 5 80 5 5 90 6 5 95 5 95 8 5 90 5 80 10 5 60 11 5 30 Answer the following questions using information from the above table. 1. Which input is the fixed input? Which is the variable input? 2. How much is the fixed costs? 3. What is the variable cost of producing 30 units of output? 4. Over what range of variable input usage does increasing marginal returns exist? 5. Over what range of variable input usage does decreasing marginal returns exist? 6. Over what range of variable input usage does negative marginal returns exists? b. You are the manager of a firm that sells output at a…
ans ences rations If in Year 1 the price level was 100 and real GDP was $20 trillion and in Year 2 the price level was 105 and real GDP was $21 billion, then the predominant change that occured in Year 2 was OA a decrease in aggregate demand. B. an increase (shift to the right) in short-run aggregate supply. OC. a decrease (shift to the left) in short-run aggregate supply OD. an increase in aggregate demand.
Suppose now the government passes a law that significantly increases the minimum wage. This change in policy will cause the natural rate of unemployment to which will: • Shift the long-run aggregate supply curve to the right O Not impact the long-run aggregate supply curve O Shift the long-run aggregate supply curve to the left Complete the following table by determining how each event impacts the position of the long-run aggregate supply (LAS) curve. Direction of LRAS Curve Shift A government-sponsored training program increases the skill level of the workforce. Many workers leave to pursue more lucrative careers in foreign economies. A scientific breakthrough significantly increases food production per acre of farmland.
Price level Potential output SRAS P3 PI P2 Real GDP Y1 Y3 Refer to Exhibit 10.1, which shows the short-run aggregate supply (SRAS) curve of an economy. At a price of P2, firms will O supply less than potential output. O supply more than potential output. O supply potential output. O increase prices. O decrease prices.
The long-run aggregate supply curve relates the aggregate price level to real GDP O in the short run. after factor prices are fully adjusted to eliminate output gaps. O when the wage level is not responding to the output gaps. when technology is improving the labour productivity.
Which of the following government actions will shift the aggregate demand right? Select one: O O O a. a rise in personal income taxes b. closing up a military facility to reduce costs c. a repeal of an investment tax credit d. an increase in the money supply
Question 29 Which of the following factors will not shift the long-run aggregate supply curve? O An increase in capital accumulation. An increase in available resources. An increase in the price level. An improvement in production technology.
If the economy starts at O and moves to R in the short run, the economy PRICE LEVEL R LRAS O O moves to O in the long run. moves to P in the long run. moves to Q in the long run. a QUANTITY OF OUTPUT O stays at R in the long run. AD₂ SRAS, SRAS, AD
Which of the following would cause the Aggregate Supply curve to move from AS to AS2 in the graph below? A) A general increase in energy and labor cost for businesses. B) A general decrease in labor cost for businesses. C) An increase in productivity. D) A federal government increase in spending.
In order to shift the vertical aggregate supply curve to the left, which of the following would have to occur? O expansion of potential GDP O increase in productivity flexible wage and price adjustments O breakdown of key market institutions
Why the slope of the aggregate supply curve differs in the short-run and in the long-run? Why the longrun aggregate supply curve is vertical and why the short-run supply curve is upward sloping? Explain indetail