?Exhibit 10A-1 Aggregate demand and supply model
?Beginning from short-run equilibrium at point E2 in Exhibit 10A-1, the economy's movement to a new position of long-run equilibrium would best be described as:
A. ?a movement along the AD2 curve with a shift in the SRAS1 curve.
B. ?a movement along the SRAS2 curve with a shift in the AD2 curve.
C. ? a shift in the LRAS curve to an intersection at E1.
D. ?no shift of any kind.
Answer: A
Economics
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Refer to Scenario 14-1. M1 in this simple economy equals
A) $1,000. B) $2,000. C) $3,000. D) $8,000.
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Bill lives in Montana and likes to grow zucchini. He applies fertilizer to his crops twice during the growing season and notices that the second layer of fertilizer increases his crop, but not as much as the first layer. What economic concept best explains this observation?
a. The law of diminishing marginal utility. b. The law of diminishing returns. c. Return equalization principle. d. The principal-agent problem.
Economics