How do the following affect the equilibrium price in a market?
a. A leftward shift in demand
b. A rightward shift in supply
c. A large rightward shift in demand and a small rightward shift in supply
d. A large leftward shift in supply and a small leftward shift in demand
a. Everything else remaining unchanged, a leftward shift in demand will lower the equilibrium price in the market.
b. Everything else remaining unchanged, a rightward shift in supply will lower the equilibrium price in the market.
c. Both the demand and supply curves will shift to the right but the shift in the demand curve will be greater. This means that that equilibrium price is likely to increase.
d. Both the demand and supply curves will shift to the left but the shift in the supply curve is greater than the shift in the demand curve. This means that the equilibrium price is likely to increase.
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Sam Lewis owns a firm in New York City's Garment District. If Sam keeps adding workers to use the same number of sewing machines, eventually the workplace will become so crowded that workers will get in each other's way. At this point
A) the marginal product of labor in Sam's business would be negative and his total output would decrease. B) Sam should encourage his workers to share their sewing machines. C) Sam's business will be in violation of safety rules that have been established by the New York City government. D) Sam should begin using a division of labor in his business.
The rate at which aggregate supply changes to restore equilibrium at potential output depends crucially on _____
Fill in the blank(s) with the appropriate word(s).