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
You might also like to view...
The marginal product of labor is
A) total product divided by labor. B) the change in total product divided by the increase in labor. C) a measure of labor. D) output that does not meet quality specifications. E) total product minus the quantity of labor.
Effective cooperation among the members of a commercial society is more likely when
A) economic decisions are placed in the hands of democratically-elected committees. B) everyone's income is approximately the same. C) people produce for use rather than for profit. D) prices do not change in response to temporary changes in circumstances. E) property rights are clearly defined.
A firm produces output according to the production function, q = L4/3K1/2 and faces input prices equal to w = $20 and r = $80. What is the minimum cost of producing 1140 units of output?
A) Cost = $780. B) Cost = $694 C) Cost = $2,071. D) Not enough information is given to answer this problem.
Which of the following is correct regarding an unregulated natural monopoly?
a. An unregulated natural monopoly will set output where the average cost curve intersects demand, and will set price equal to average cost. b. An unregulated natural monopoly will set output where the marginal cost curve intersects demand, and will set price equal to marginal cost. c. An unregulated natural monopoly will set output where the marginal revenue curve intersects the marginal cost curve, and will set price at the demand curve. d. An unregulated natural monopoly will set output where the average cost curve intersects marginal revenue curve, and will set price at the demand curve.