If a hurricane were to wipe out the majority of the eastern seaboard in the United States, it would likely cause a:
A. short-run supply shock.
B. long-run supply shock.
C. long-run demand shock.
D. short-run demand shock.
Answer: B
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What is the one thing that all firms in an imperfectly competitive market have in common?
What will be an ideal response?
Which of the following ideas is the most plausible?
a. Reducing a high tax rate is less likely to increase tax revenue than is reducing a low tax rate. b. Reducing a high tax rate is more likely to increase tax revenue than is reducing a low tax rate. c. Reducing a high tax rate will have the same effect on tax revenue as reducing a low tax rate. d. Reducing a tax rate can never increase tax revenue.
A country that has a lower opportunity cost of producing a good:
a. has a comparative advantage. b. requires fewer labor hours to produce the good. c. All of the answers are correct. d. can produce the good using fewer resources than another country.
Exhibit 5-9 Supply and Demand Curves for Good X
?
As shown in Exhibit 5-9, the price elasticity of demand for good X between points E and B is:
A. 3/7 = 0.43. B. 7/3 = 2.33. C. 1/2 = 0.50. D. 1.