What happens in the short run and long run in a constant-cost industry such as bags of ice after a natural disaster like a hurricane?
What will be an ideal response?
In the short run the price of ice rises, maybe dramatically, but in the long run the quantity rises as the higher price induces more sellers into the market and the price quickly comes back down to the long-run constant cost.
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Refer to the scenario above. Which of the following strategy combinations denote a Nash equilibrium?
A) (Left, Left) B) (Left, Right) C) (Right, Left ) D) (Right, Right)
Interest rate differences between countries depend on
A) differences in expected inflation, but not on expected changes in the real exchange rate. B) differences in expected changes in the real exchange rate, but not on expected inflation. C) neither differences in expected inflation, nor on expected changes in the real exchange rate. D) differences in expected inflation and nothing else. E) differences in expected inflation, and on expected changes in the real exchange rate.
To calculate GDP:
A. add the quantity of all goods and services sold in an economy in a year. B. add the quantity of all final goods and services produced in an economy in a year. C. weight the output of each good and service produced in an economy in a year by its price in that year and then total the result. D. weight the output of each final good and service produced in an economy in a year by its price in that year and then total the result.
Which of the following correctly identifies the impact of tariffs on the producers of import-competing products in the imposing country?
A. They are forced to go out of business in the long run. B. They can expand their production and sales. C. They can price their products higher than the imported goods. D. They are forced to charge a price equal to the average cost of production.