Which of the following is an example of an adverse supply shock?
a. a decrease in the money supply
b. a tax cut
c. a worldwide drought
d. decreased government spending
c
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Sammy has a drone that he values at $1,500. Dean values the same drone at $2,000. Sammy decides to sell the drone to Dean for $1,800. If the government imposes a $250 tax on the sale of drones,
A) Sammy and Dean would not be able to complete the transaction. B) Sammy and Dean would still be able to complete the transaction. C) the tax would cause a deadweight loss of $500. D) Both A and C are correct.
The exchange rate changed from € 2.5/ $ to € 2.0/ $. Therefore:
a. The euro appreciated by 25% and the dollar depreciated by 20%. b. The euro depreciated by 25% and the dollar appreciated by 20%. c. The euro appreciated by 20% and the dollar depreciated by 25%. d. The euro depreciated by 20% and the dollar appreciated by 25%. e. The euro appreciated by 20% and the dollar depreciated by 20%.
Which of the following statements is correct?
a. The demand for natural gas is more elastic over a short period of time than over a long period of time. b. The demand for smoke alarms is more elastic than the demand for Persian rugs. c. The demand for bourbon whiskey is more elastic than the demand for alcoholic beverages in general. d. All of the above are correct.
The forces of demand and supply ensure that at equilibrium
A. there are no shortages or surpluses. B. there are no shortages, but there may be surpluses. C. there are no surpluses, but there may be shortages. D. there may be shortages or surpluses.