The short-run supply curve for a perfectly competitive firm is that part of the firm's marginal cost curve that lies above the minimum point of its average variable cost curve

In the above figure, the slope across the arc between a and b is

A) 2/5. B) 1. C) 3/2. D) 5/2.

If there is an increase in the price of oil and the Fed wishes to maintain price stability, what should it do?

a. Do nothing, because the self-correcting mechanism will adjust the economy b. Sell bonds in the open market c. Wait, because the price level seldom changes when there is an increase in the price of oil d. Encourage firms to not adjust the wages they pay e. Buy bonds in the open market