Exhibit 5-1

question 133

Multiple Choice

Exhibit 5-1
-In Exhibit 5-1 in period 2,which of the following would cause the aggregate supply curve to shift from AS to AS'.

• A)an increase in resource prices,improved technology,or an extension of patent protection
• B)a decrease in resource prices,improved technology,or an extension of patent protection
• C)a decrease in resource prices,improved technology,or a shortening of patent protection
• D)an appreciation of the dollar,higher inflation in Europe,a decrease in resource prices
• E)a depreciation of the doller,higher inflation in Asia,improved technology

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Definitions:

Social Welfare

Programs and policies designed to provide support and assistance to individuals and families in need, aiming to enhance the quality of life and promote social justice.

Excess Capacity

A situation where a firm produces at a lower scale of output than it has been designed to handle.

Profit-Maximizing

The process of identifying the best level of output at which a company can produce goods or services to achieve the highest possible profit.

Product-Variety Externalities

Economic externalities that arise when the introduction of new products benefits consumers by providing a wider array of choices, potentially affecting their utility and the demand for various goods.