Carla H is considering buying a few tablet devices for her bakery so customers can place orders for her signature cupcakes on their own, straight from the counter.

Reason: She fears the $7.25 an hour that she currently pays her 10 customer service employees, could rise, perhaps to $9 an hour under a pledge by President Obama earlier this month.

Key Facts from Article

Ms. H believes that the customer-ordering process has to be automated, in order to remain profitable with self-serving tablets

The combined cost of two tablets, plus a customized application for displaying products with descriptions and processing orders range from $5,000 - $15,000 to implement

Some businesses see a promise in selling technologies to small businesses to help do-away with low-wage workers

A $22,000 six-foot-tall robot with flexible arms, a face screen, and rolling pedestals replaces the low-wage workers at small manufacturing firms that can't afford traditionally automated robots that require someone to program it

Questions

What must the firm do in order to produce the same level of output at the new set of input prices? (Assume that only the price of labor increased, the price of robots remained the same). Hint: experiment with your isocost lines, keeping in mind what the slope is equal to).

What happens to the cost-minimizing amounts of labor and robots after the wage increase? Draw graphically. You should have your original tangency and your new tangency on the desired isoquant.

What has happened to Total Cost?

A decrease in business confidence and a decrease in consumer confidence O A. decreases aggregate demand and aggregate supply; has no effect on either aggregate demand or aggregate supply O B. decreases aggregate supply but has no effect on aggregate demand; decreases aggregate demand O C. has no effect on either aggregate demand or aggregate supply; has no effect on either aggregate demand or aggregate supply O D. decreases aggregate demand and aggregate supply; decreases aggregate demandQuestion 13 [0.5 points) Suppose the economy is initially in long-run equilibrium and there is a negative demand shock to the economy. In the short run, 0 aggregate demand will fall and the aggregate price level will fall. 0 aggregate demand will rise and the aggregate price level will rise. 0 aggregate demand will fall and the aggregate price level will rise. 0 aggregate demand will rise and the aggregate price level will fall. 0 You can not tell what will happen without knowing whether the economy is in a necessionarl.r or inflationaryr gap. Question 16 2 pts Which of the following statements is true? O The intersection of the aggregate demand and aggregate supply curves determines the equilibrium price level and the equilibrium level of real GDP. O The aggregate demand curve indicates a positive relationship between the price level and GDP. O The intersection of the aggregate demand and aggregate supply curves determines the equilibrium price and quantity. O Aggregate demand and aggregate supply determine the equilibrium price and quantity of a single good. Other things equal, a downward shift of the aggregate demand curve implies that the economy enters an expansionary phase.QUESTION 18 3 po One difference between the classical and Keynesian models of aggregate demand is that a. in the Keynesian model, aggregate demand only changes with changes in the money supply. Ob. in the Keynesian model, the aggregate demand curve is horizontal. OF In the Keynesian model, any factor that leads to a change in aggregate expenditures (except for a change in the price level) will also lead to a change in aggregate demand. Od. in the classical model, the aggregate demand curve is vertical. Oe. In the classical model, an increase in consumption spending leads to an increase in aggregate demand