An abnormally large grain crop due to highly favorable weather conditions in the Midwest is an example of
What will be an ideal response?
a supply shock that will increase short-run aggregate supply.
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If the social cost of producing a good exceeds the private cost,
A) a negative externality exists. B) no externalities exist. C) a positive externality exists. D) the market is efficient.
If a monopolistically competitive seller's marginal cost is $3.56, the firm will decrease its output if
A) its marginal revenue is less than $3.56. B) its marginal revenue is equal to $3.56. C) its marginal revenue is more than $3.56. D) its average total cost is equal to $4.00. E) Both answers B and D are correct.
If a few oil-producing countries in the Middle East decide to jointly limit the production of oil,
A) they are forming a cartel. B) they would like the price of oil to be the same as if the market were perfectly competitive. C) game theory does not apply to their actions because they are nations, not firms. D) they will try to operate as a large, monopolistically competitive firm. E) they will agree to lower the price of oil in order to increase their profits.
Trade theory suggests that Japan would gain from a subsidy the United States provides its grain farmers if the gains to Japanese consumers of wheat products more than offsets the losses to Japanese wheat farmers. This would occur as long as Japan
A) is a net importer in bilateral trade flows with the United States. B) is a net importer of wheat. C) has a comparative advantage in wheat. D) has an absolute advantage in producing wheat. E) is involved in intra-industry trade with the United States.