Refer to Figure 16.2. For the given Phillips curve, a decrease in aggregate demand, ceteris paribus, could cause a
A. Rightward shift in the curve.
B. Movement from point A to point B.
C. Movement from point B to point A.
D. Leftward shift in the curve.
Answer: B
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Which of the following is not considered to be a determinant of the price elasticity of demand for a particular good?
A) The number of available substitutes. B) The cost of the good relative to total income. C) The quantity of the good that is supplied to the market. D) The time period under consideration.
At the level of output where the marginal cost and marginal revenue curves intersect, a monopolist's demand curve passes above its average total cost curve. The firm will:
a. be able to make a pure economic profit. b. stay in operation in the short-run, but shut down. c. shut down in the short-run. d. increase its price.