In 2016, tornadoes damaged many parts of the U.S. Midwest, destroying homes, businesses, schools, and infrastructure. In strictly economic terminology, these tornadoes are said to have caused
A) scarcity, because the damages made food and shelter scarce.
B) scarcity, because some goods were difficult to get.
C) shortages, because supplies were cut off and goods were destroyed.
D) tradeoffs, because some areas of the country were damaged when others were not.
Answer: C
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Bargaining costs are generally high in cases involving environmental externalities because
a. there are strong incentives to be a free rider. b. many individuals may be affected by the externalities. c. it is difficult to measure the costs of the externalities. d. all of the above.
Which of the following statements regarding checkable deposits is most accurate?
A. Checkable deposits are a less important source of bank funds today than in 1970. B. Checkable deposits are no longer a source of bank funds. C. Checkable deposits continue to be the largest source of bank funds. D. Checkable deposits are a larger source of bank funds today than in 1970.
If U.S. demand for imports increases it would be expected that the value of the dollar in international currency markets would tend to
A. increase. B. change in a manner that cannot be determined without additional information concerning the direction of the shifts in the demand for and supply of dollars. C. decline. D. remain unchanged.
Which of the following is not an assumption that we make in analyzing pure competition in the long run?
A. Firms are free to enter into, or exit from, a purely competitive market B. We may talk about a "representative" firm, by assuming that competitive firms all have identical cost curves C. Firms may increase output by expanding their plant sizes D. Profits are not relevant to firm behavior anymore, because competitive firms earn zero profits in the long run