If the long-run market supply curve is perfectly elastic, a decrease in variable cost will:
a. shift the supply curve upward to a higher market-clearing price level.
b. shift the supply curve downward to a lower market-clearing price level.
c. shift the supply curve to the right to a higher market-clearing output.
d. shift the supply curve to the left to a lower market-clearing output.
B
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In the circular flow diagram, aggregate expenditure includes the sum of
A) saving and investment. B) consumption and investment. C) consumption, investment, and saving. D) income and saving.
Sarah gets a salary increase of 20 percent. Before her raise, she purchased 5 pounds of hamburger and 1 pound of beef stew a month. After her raise, she consumes 2 pounds of hamburger and 3 pounds of beef stew a month. If everything else is held constant, we know that
A) hamburger is an inferior good and beef stew is a normal good for Sarah. B) hamburger is a normal good and beef stew is an inferior good for Sarah. C) both hamburger and beef stew are normal goods for Sarah. D) both hamburger and beef stew are inferior goods for Sarah.