The economy is operating at maximum capacity. The short-run AS curve is _______. An increase in the price level will ______ output.
a) horizontal; not change
b) horizontal; increase
c) vertical; not change
d) vertical; increase
Answer: c) vertical; not change
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Many economists view ________ as explaining most of the increase in the natural rate of unemployment in the U.S. from 1960 to 1980
A) the rise in the percentage of young workers in the labor force B) an increase in the percentage of the working-age population receiving disability insurance C) a decrease in the size of the prison population D) increased use of temporary workers
Answer the following statement(s) true (T) or false (F)
1. If a firms fixed costs increase from $2,000 to $3,000, then its marginal cost is $1,000. 2. If a firm can sell one more unit of its product for $7 and the marginal cost of producing that one more unit is only $5, then it should definitely produce and sell one more unit.