If a hurricane were to wipe out the majority of the eastern seaboard in the United States, it would likely cause a:
A. short-run supply shock.
B. long-run supply shock.
C. long-run demand shock.
D. short-run demand shock.
Answer: B
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In the foreign exchange market, the exchange rate is volatile because the
A) factors that influence the supply of dollars also influence the demand for dollars. B) demand for dollars changes more frequently than the supply of dollars. C) both the demand curve for dollars and the supply curve of dollars are very flat. D) supply of dollars changes more frequently than the demand for dollars. E) None of the above is related to the volatility of the exchange rate.
What is one reason suppliers might offer a discount for quantity purchases?
A) reduced storage costs B) lower marginal cost C) lower marginal benefit D) price gouging
Under autarky, domestic producer surplus is represented by the area
A) above the supply curve and below the equilibrium price. B) above the supply curve and below the demand curve. C) below the demand curve and above the equilibrium price. D) above the demand curve and below the supply curve.
Suppose a firm can only vary the quantity of labor hired in the short run. An increase in the cost of capital will
A) increase the firm's marginal cost. B) decrease the firm's marginal cost. C) have no effect on the firm's marginal cost. D) More information is needed to answer the question.