Shrimp is an increasingly popular part of the American diet. Louisiana shrimpers who represent the bulk of the U.S. industry were almost all put out of business by Hurricane Katrina. How did the hurricane affect the equilibrium price and quantity of
shrimp?
What will be an ideal response?
The supply curve for shrimp shifted to the left resulting in a higher equilibrium price and lower equilibrium quantity.
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The purpose of an effluent fee is to
A) reduce the amount produced of a good and to raise the market price. B) correct for pollution while keeping the price of the good the same as before the correction. C) reward people producing externalities. D) encourage producers to keep the quantity produced the same while lowering the price.
Total costs increase from $1,500 to $1,800 when a firm increases output from 40 to 50 units.. Which of the following are true?
a. AC rise by $1.00 b. AC fall by $1.50 c. AC rise by $1.50 d. AC fall by $1.00
Alice has spent all of her income on ten different goods, and knows that the marginal utilities per dollar spent on the ten goods are equal. Which of the following statements is correct?
a. She could possibly increase her total utility by redistributing her income among the ten items. b. She has violated the assumption of rationality. c. The law of diminishing marginal utility does not apply to her. d. Any reallocation of income among the ten items will reduce her total utility. e. She must be at a point inside of her budget line.
If a linear, two-good production possibilities curve has a slope of ?2, then:
A. you have a comparative advantage in the good measured on the vertical axis. B. having an additional unit of the good measured on the vertical axis means giving up ½ of a unit of the good measured on the horizontal axis. C. you have an absolute advantage in the good measured on the vertical axis. D. having an additional unit of the good measured on the vertical axis means giving up 2 units of the good measured on the horizontal axis.