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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If the personal assets of the owners cannot be claimed if the business is bankrupt, the owners are said to have
A) a partnership type of business. B) unlimited liability. C) a proprietorship type of business. D) limited liability.
Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real GDP and current international transactions in the context of the Three-Sector-Model?
a. Real GDP falls, and current international transactions rises. b. Real GDP rises, and current international transactions remain the same. c. Real GDP rises, and current international transactions become more negative (or less positive). d. Real GDP rises, and current international transactions become more positive (or less negative). e. Real GDP falls, and current international transactions become more negative (or less positive).
Suppose the demand function for cable TV service is given by QCTV = 15 - 0.25 × PCTV + 0.0005 × M + 0.3 × PSTV, where QCTV is the quantity of cable TV demanded (thousands of households), PCTV is the price of cable TV, M is income and PSTV is the price of satellite TV service. We can see that:
A. cable TV and satellite TV are substitutes. B. cable TV and satellite TV are complements. C. satellite TV is a normal good. D. satellite TV is an inferior good.
During the 1960s, U.S. steel firms argued they needed tariff protection because Germany and Japan were using new mills to make steel since their old mills were destroyed in World War II. Essentially, this argument is a form of the
A) infant-industry argument. B) anti-dumping argument. C) countering foreign subsidies argument. D) national defense argument.