If the price level in an economy turns out to be higher than that expected by workers and firms, _____.
a. businesses increase production
b. the economy's potential output level increases.
c. the economy's short-run aggregate supply curve shifts rightward.
d. the economy's short-run aggregate supply curve shifts leftward.
e. a recessionary gap develops.
a
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Alan purchases 10 percent fewer bags of chips when his income decreases by 5 percent. Based on only this information, we know that for Alan
A) chips are a normal good. B) chips are a complement to salsa. C) chips are a substitute for pretzels. D) chips are an inferior good. E) the price of chips fell.
At the optimal or efficient level of an activity, the activity's marginal benefit must
A) be zero. B) be greater than zero. C) equal the marginal cost of the activity. D) exceed the marginal cost of the activity.