The short-run effects of a favorable supply shock will include
a. an increase in the general level of prices and a decrease in real output.
b. an increase in the general level of prices and an increase in real output.
c. a decrease in the general level of prices and a decrease in real output.
d. a decrease in the general level of prices and an increase in real output.
D
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Wheat is sold in world markets, usually priced in terms of bushels. In the market for wheat, the price elasticity of demand for wheat would be expressed as
A) the number of bushels of wheat sold. B) the number of whatever currency is used in purchasing the wheat. C) the number of dollars spent on wheat. D) a unitless number.
The average total cost curve of a firm is U-shaped
a. True b. False Indicate whether the statement is true or false
Suppose the fixed cost of building a nuclear power plant is $1 billion. Suppose also that the only variable cost is the labor of Homer Simpson, and he earns $10 per hour. If the plant generates 1,000 kilowatts each hour, and has already generated 1 billion kilowatts, what can you say about the marginal cost of the next kilowatt?
A. The marginal cost is falling. B. The marginal cost is equal to $.01. C. The marginal cost is equal to $1.01. D. The marginal cost is rising.
Suppose that a national election occurs that generates a feeling of certainty in the market. It is likely that this incident will ________ the level of investment spending.
A. decrease B. not affect C. increase D. neutralize