An increase in the long-run aggregate supply curve indicates that
a. the natural rate of unemployment has increased.
b. unemployment has increased.
c. the general level of prices has increased.
d. potential real GDP has increased.
D
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A man who thinks he would save money by driving to work rather than taking the bus, but who nonetheless elects to take the bus because driving in rush-hour traffic frightens him, is
A) behaving inefficiently. B) choosing what is for him the most efficient way to commute. C) rejecting economic efficiency for personal reasons. D) wasting scarce resources.
According to the law of diminishing returns
A) the total product of an input will eventually be negative. B) the total product of an input will eventually decline. C) the marginal product of an input will eventually be negative. D) the marginal product of an input will eventually decline. E) none of the above