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

Question

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

Quizplus · Accepted Answer

A decrease in resource prices and improved technology would lower production costs and increase productivity, shifting the aggregate supply curve to the right. An extension of patent protection can also encourage innovation, further enhancing supply.