An increase in the price of a nonlabor input such as oil will cause
A) a movement down the SRAS curve.
B) a movement up the SRAS curve.
C) a leftward shift in the SRAS curve.
D) a rightward shift in the SRAS curve.
E) no change regarding the SRAS curve.
C
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Suppose the market demand curve for apples can be expressed as QD = 220 - 2P - Pb + 0.2Y, where QD is the quantity of apples demanded, P is the price of an apple, Pb is the price of a banana, and Y is the average annual household income in thousands of dollars. What is the change in the quantity demanded of apples if the income increases by $10,000?
A) 220 apples B) 2 apples C) 40 apples D) Not enough information to answer the question.
Which of the following explains most accurately why the firm's short-run marginal cost curve will eventually rise?
a. As more of the variable factor is used, its price will rise. b. When diminishing marginal returns set in, it will take ever-larger quantities of the variable resources to produce an additional unit of output. c. As the variable factor is used more intensely, its marginal product will rise, causing an increase in marginal costs. d. As the size of the firm increases, the operational efficiency of the firm declines, causing an increase in marginal costs.