Answered

Westonci.ca is the best place to get answers to your questions, provided by a community of experienced and knowledgeable experts. Discover detailed solutions to your questions from a wide network of experts on our comprehensive Q&A platform. Our platform offers a seamless experience for finding reliable answers from a network of knowledgeable professionals.

In the short run, the quantity of output that firms supply can deviate from the natural level of output if the actual price level in the economy deviates from the expected price level. Several theories explain how this might happen.

For example, the misperceptions theory asserts that changes in the price level can temporarily mislead firms about what is happening to their output prices. Consider a soybean farmer who expects a price level of 100 in the coming year. If the actual price level turns out to be 90, soybean prices will _________, and if the farmer mistakenly assumes that the price of soybeans declined relative to other prices of goods and services, she will respond by ____________the quantity of soybeans supplied. If other producers in this economy mistake changes in the price level for changes in their relative prices, the unexpected decrease in the price level causes the quantity of output supplied to __________ the natural level of output in the short run. Suppose the economy's short-run aggregate supply (AS) curve is given by the following equation:

Sagot :

ogorwyne

Answer:

1. A fall in prices of soybean

2. Reduce quantity she supplies

3. Falls below

Explanation:

We are to fill in the blanks here

1. In this question the farmer expected price level of 100 but the actual price realized was 90 so there would be a fall in the price of soybean.

2. If farmer feels that price of other goods caused this fall, she would reduce the quantity of soybean that she supplies

3. The quantity supplied is then going to fall below natural level in the short run

Thank you for visiting. Our goal is to provide the most accurate answers for all your informational needs. Come back soon. Thanks for using our platform. We aim to provide accurate and up-to-date answers to all your queries. Come back soon. Westonci.ca is here to provide the answers you seek. Return often for more expert solutions.