Workers expect inflation to rise from 3 to 5 next year. As a result, this should
A) move the economy down along a stationary short-run aggregate supply curve.
B) move the economy up along a stationary short-run aggregate supply curve.
C) shift the short-run aggregate supply curve to the left.
D) shift the short-run aggregate supply curve to the right.
Question 2
If marginal cost is zero, with an optimal two-part tariff
A) total revenue is maximized.
B) the firm does not have to charge a fixed-fee portion.
C) consumers maximize their surplus
D) firms may not maximize profit.
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