If a natural disaster were to cause a negative long-run supply shock to the economy, once the economy adjusts, the new equilibrium will be at a:
A. higher price level and lower level of output.
B. lower price level and lower level of output.
C. higher price level and higher level of output.
D. lower price level and higher level of output.
Answer: A
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The concept based on the assumption that we get bargains on each unit we purchase until the last one is called
A. total utility. B. consumer surplus. C. marginal utility. D. the law of diminishing marginal utility.
If the voluntary contributions experiment described at the end of the chapter is played multiple times, we would expect:
A. the voluntary contributions will be zero or close to zero. B. the voluntary contributions will exceed the amount required to provide the public good. C. the voluntary contributions will equal the amount required to provide the public good. D. the voluntary contributions will fall short of the amount required to provide the public good, but only by a small amount.
The difference between what producers receive at the market clearing price and the total amount that they would have been willing to accept for the total quantity produced in a market is called
A. producer surplus. B. market surplus. C. excess demand. D. production excess.
What is the difference between the short run, long run and very long run?
What will be an ideal response?