In September 2005, destruction to U.S. gasoline refineries was caused by back-to-back storms along the U.S. Gulf Coast—Hurricane Katrina and Hurricane Rita. In one week, the average price of a gallon of gasoline in the United States increased by about
40 cents. Which of the following best explains why these events pushed up the price of gasoline?
A) The demand curve for gasoline shifted to the left along the supply curve for gasoline.
B) The supply curve for gasoline shifted to the left along the demand curve for gasoline.
C) The demand curve for gasoline shifted to the right along the supply curve for gasoline.
D) The supply curve for gasoline shifted to the right along the demand curve for gasoline.
Answer: B
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Why does a nation experience increasing opportunity cost?
A) As the nation moves from a production point within the PPF to one on the PPF, opportunity costs increase. B) As the nation moves from a production point within the PPF to another point also within the PPF, opportunity costs increase. C) When the amount of resources increases, the opportunity cost of all goods and services increases. D) Resources are not equally productive in producing different kinds of goods and services. E) Because the nation cannot produce at the unattainable production points that lie beyond the PPF.
The government of Richland has set a minimum wage for factory workers. This will lead to an ________ if above the current market wage
A) increase in total surplus B) increase in the number of workers supplied C) excess demand for workers D) increase in income inequality
An example of physical capital is:
A. a computer. B. a pen. C. a factory. D. All of the items are examples of physical capital.
The budget constraint shows the
A) combinations of goods that generate the same amount of total satisfaction. B) possible combinations of goods that can be purchased with a specified income. C) changes in consumption of goods that a consumer makes when his income increases. D) amount of a good the consumer will buy at various prices.