In a long-run equilibrium in a perfectly competitive market, firms are selling at a price equal to average cost

Assume that both the demand curve and the supply curve for MP3 players shift to the right but the demand curve shifts more than the supply curve. As a result

A) the equilibrium price of MP3 players will decrease; the equilibrium quantity may increase or decrease. B) the equilibrium price of MP3 players will increase; the equilibrium quantity may increase or decrease. C) the equilibrium price of MP3 players may increase or decrease; the equilibrium quantity will increase. D) both the equilibrium price and quantity of MP3 players will increase.

Adam Smith argued that greater specialization and division of labor are likely to:

A. reduce worker productivity. B. improve standards of living. C. reduce standards of living. D. replace workers with machines, resulting in massive unemployment.