What is the shape of the long-run aggregate supply curve? Why?
What will be an ideal response?
The long-run aggregate supply curve is vertical because, in the long run, people have full information about all relevant facts and make their decisions based only on relative prices and not on the absolute price level.
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Refer to the table above. Which of the following statements is true about the marginal product of labor?
A) The marginal product initially decreases with the first few workers and then increases. B) The marginal product initially increases with the first few workers and then decreases. C) The marginal product decreases as more workers are hired. D) The marginal product increases as more workers are hired.
Refer to Figure 4-5. Suppose that instead of a price ceiling, the government imposed a price floor of R1. What is the area representing consumer surplus after the imposition of the price floor?
A) C + E B) B + C + D + E C) A+ B + D D) A