Any point representing a cost and output combination that is below the long-run average cost curve:
a) may represent actual cost and production levels in the short run.
b) represents unattainable cost levels.
c) is attainable only when all factors are variable.
d) is attainable if the firm minimizes its costs according to the "principle of substitution".
e) represents less efficient cost levels than points on the long-run average cost curve.
Ans: b) represents unattainable cost levels.
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If inflation expectations rise, the short-run Phillips curve shifts
a. right, so that at any inflation rate output is higher in the short run than before. b. left, so that at any inflation rate output is higher in the short run than before. c. right, so that at any inflation rate output is lower in the short run than before. d. left, so that at any inflation rate output is lower in the short run than before.