What are supply shocks? Explain what effect adverse and favorable supply shocks have on the supply curve
What will be an ideal response?
Supply shocks are external events that shift the aggregate supply curve. Adverse supply shocks would cause aggregate supply to decrease, shifting the AS curve to the left. Favorable supply shocks would cause aggregate supply to increase, shifting the AS curve to the right.
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Japan can use all of its resources to produce 100 videos or 400 shoes. China can use all of its resources to produce 25 videos or 200 shoes
Which nation has the comparative advantage in shoes and which nation has the comparative advantage in videos?
The welfare program economists believe to be most compatible with economic efficiency is
a. a regressive tax system. b. AFDC. c. a negative income tax. d. Medicare/Medicaid.
One source of the supply of dollars in the world is
A. the purchase of U.S. exports by foreign residents. B. U.S. imports of foreign merchandise. C. the sale of U.S. domestic assets to foreigner residents. D. U.S. sales of gold to foreigner residents.
In Figure 45.3, the fact that workers become more valuable to employers because of the training required for certification is shown by 
Figure 45.3
A. the shift in old supply curve. B. the increase in the demand curve. C. the kinked shape of the new supply curve. D. the slope of the old demand curve.