What happens to aggregate supply when production costs adjust ...

[neverstopbelieb]

What happens to aggregate supply when production costs adjust completely to price increases?
 a. Both equilibrium output and prices increase
  b. Only prices rise; equilibrium output remains fixed
  c. Only equilibrium output rises; equilibrium prices remain fixed
  d. Equilibrium output falls while prices rise
  e. Both equilibrium output and prices remain fixed

Question 2

The fallacy of composition is:
 a. the erroneous view that an economic activity can sometimes exceed the sum of its components.
 b. the erroneous view that what is true for the individual will also be true for the group.
 c. the view that the aggregation of economic activity will necessarily lead to an outcome that is different than the outcome generated by each individual in the group.
  d. the idea that association need not imply causation.

[kiamars2010]

Answer to Question 1

b

Answer to Question 2

b

[neverstopbelieb]

Thank you

[kiamars2010]

No problemo