Refer to the information provided in Figure 3.10 below to answer the following question(s).
Figure 3.10Refer to Figure 3.10. A movement from Point C to Point B on supply curve S2 would be caused by a(n)
A. increase in the price of hamburgers, assuming hamburgers are a substitute for pizza.
B. decrease in the price of pizza.
C. decrease in the price of pizza dough.
D. increase in the demand for pizza.
Answer: D
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Long-run average cost is never greater than short-run average cost because in the long run
A) capital costs equal zero. B) the firm can move to the lowest possible isocost curve. C) wages always increase over time. D) wages always decrease over time.
If policy makers think the natural rate of unemployment is lower than it really is, then their policies designed to move the economy to the estimated natural rate, if continued over the long run, will: a. cause continuing inflation
b. shift the long-run aggregate supply curve to the right. c. shift the supply curve of labor to the right. d. lead to a lower price level. e. keep the economy below its potential GDP level.