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Consider an Economy Initially at Long-Run Equilibrium with Output (Y)equal

question 133

Multiple Choice

Consider an economy initially at long-run equilibrium with output (Y) equal to potential output (Y*) .If the SRAS curve is positively sloped,then an increase in the demand for Canadian-made goods in Europe will lead to ___________ in the price level,in the short run.In the long run,the SRAS curve will shift to the left and the equilibrium will be at _________.


Definitions:

MC

Refers to Marginal Cost, the increase in total cost that arises from producing an additional unit of output.

Cost Curves

Graphs that depict how the costs of production vary with changes in output, including total cost, average cost, and marginal cost curves.

Profit-maximizing

The method or tactic of modifying output and setting prices to maximize profits.

ATC

It refers to dividing the entire cost of production by the number of units produced to get the Average Total Cost.

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