Which of the following is true of a beneficial supply shock?
What will be an ideal response?
It can lead to a temporarily lower price level.
You might also like to view...
When the price of perfume changes from $24 to $26, the quantity supplied increases from 100 jars to 150 jars. What is the elasticity of supply of perfume?
A) 0.04 B) 25.0 C) 5.0 D) 0.2
Paul goes to Sportsmart to buy a new tennis racquet. He is willing to pay $200 for a new racquet, but buys one on sale for $125. Paul's consumer surplus from the purchase is
A) $325. B) $200. C) $125. D) $75.
If a price ceiling of $1.50 per gallon is imposed on gasoline, and the market equilibrium price is $2, then the price ceiling is a binding constraint on the market
a. True b. False Indicate whether the statement is true or false
Answer the following statement true (T) or false (F)
1) The size and scope of government inhibit the flow of information to decision makers, leading to inefficient outcomes. 2) The pursuit through government of a transfer of wealth at society's expense is called "rent seeking." 3) The principal-agent problem is a problem for the private sector but does not apply to political decision making. 4) Medicare is the U.S. government's largest unfunded liability. 5) A debt crisis refers to how much government spending exceeds tax revenues in a given year.