Author Question: Antonio's makes the greatest pizza and delivers it hot to all the dorms around campus. Last week ... (Read 67 times)

mckennatimberlake · **on:** Jun 30, 2018

Antonio's makes the greatest pizza and delivers it hot to all the dorms around campus. Last week Antonio's supplier of pepperoni informed him of a 25 increase in price. Which variable determining the position of the supply curve has changed and what effect does it have on supply?
a. future expectations; supply decreases
b. future expectations; supply increases
c. input prices; supply decreases
d. input prices; supply increases

Question 2

What happens to aggregate demand if the demand for consumption goods decreases? If the demand for investment goods increases?

ndhahbi · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

c

Answer to Question 2

If the demand for consumption goods decreases, this will cause a decrease in aggregate demand, and will shift the aggregate demand curve to the left. If the demand for investment goods increased, this would have the effect of shifting the aggregate demand curve to the right resulting in an increased level of GDP.