Macroeconomic Equilibrium: Definition, Short Run & Long Run

Instructions:

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question 1 of 3

The demand for products made at Marx Manufacturing has declined in the last week. How will the owner of Marx Manufacturing change the wages of her employees in response?

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1. Which of the following is true regarding wages and prices when the economy is in long run equilibrium?

2. Rhonda's Restaurant is experiencing a big increase in customers after adding some new menu items. What will Rhonda do with her prices?

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About This Quiz & Worksheet

Assess what you know about macroeconomic equilibrium. Answer questions on topics like how a business owner may or may not change employees' wages if there is a decline in demand and how wages/prices function in a long run equilibrium.

Quiz & Worksheet Goals

Find out how much you know about these areas of study:

  • What a business owner might do to prices if there is an increase in customers
  • Employment during a recessionionary gap
  • The results of a permanent increase in demand from consumers

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information from the related lesson on macroeconomic equilibrium
  • Knowledge application - use your knowledge to answer questions about wages with regard to the fluctuations of decline and demand
  • Making connections - use understanding of the concept of prices to recognize how they're connected to consumer demand

Additional Learning

Interested students can learn more about this part of economics in the lesson named Macroeconomic Equilibrium: Definition, Short Run & Long Run. Follow along via these points of study:

  • What aggregate demand and aggregate supply are
  • Business demand as an investment
  • How to define 'equilibrium' with regard to economics
  • Short run/long run equilibrium
  • What it means for an economy to have slack
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