Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the long run would be:

If income were distributed according to the egalitarian principle of "to each exactly the same," then one problem would be that

A) there would be little or no incentive for individuals to take risky, hazardous, or unpleasant jobs. B) individuals would have an excess desire to invest in their own human capital. C) too many individuals would want to take risky jobs. D) productivity levels would probably become too high.

Suppose that the value of the short-run absolute elasticity of demand for a good is 0.4. Then, we know the long-run absolute price elasticity of demand will be

A) 0. B) greater than 0.4. C) elastic. D) less than 0.4.