Marginal social cost includes both the marginal private cost and the marginal external cost that production imposes on society

As a result of the rightward shift in the demand curve for labor from LD0 to LD1, the equilibrium level of employment ________ and potential GDP ________

A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases

Assume that goods X and Y are substitutes and are produced in perfectly competitive markets. All else constant, in the short run, a decrease in the supply of good X would cause:

A) an increase in the demand for good Y. B) a decrease in the demand for good Y. C) an increase in the supply of good Y. D) a decrease in supply of good Y.