The apple market is perfectly competitive and is in long-run equilibrium. Now a disease kills 50 percent of the apple orchards. In the short run, the price of a bag of apples ________ and the remaining apple growers make ________ economic profit
In the long run, the ________. A) increases; zero; price of apples will return to their original level
B) remains the same; zero; orchards will be replanted and growers will make normal profits
C) increases; zero; orchards will be replanted and economic profit will return to zero
D) increases; positive; orchards will be replanted and economic profit will return to zero
D
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A local flower grower grows products in a plot of land, which is exceptionally colorful and is admired by many passersby. There is no way to charge for this in the price of the flowers. We can safely conclude that
A. the florist produces too many flowers. B. the florist produces too few flowers. C. the florist produces the right amount of flowers. D. society pays the socially optimal amount for the flowers.
The intuition behind the slope of the LM curve is that
a. as the interest rate increases, the money supply increases and income increases. b. as the interest rate increases, investment and income decreases. c. as income increases, money demand increases which increases interest rates. d. as income increases, money demand decreases which decreases interest rates. e. none of the above.
The conflict between the Vice President of Marketing and her sales staff arises because
a. the sales staff are unwilling to offer discounts b. the Vice President does not want to negotiate aggressively enough c. the sales staff want to negotiate too aggressively d. the Vice President is less willing to offer discounts to make the sale
Economics
a. studies human behavior when scarcity exists and choices must be made b. provides the only reasonable explanation of how people make decisions c. can accurately explain all human behavior since it is based on the assumption of rationality d. is better at showing the way things ought to be than the other social sciences are e. is the only social science that can explain the existence and behavior of public institutions