The table above gives data for the nation of Pearl, a small island in the South Pacific. If a supply shock decreases the quantity of real GDP supplied by $6 billion at each price level, the new equilibrium real GDP is
A) $16 billion.
B) $19 billion.
C) $22 billion.
D) $23 billion.
E) $17 billion.
C
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How can the concepts of opportunity costs, scarcity and choice be illustrated by the production possibilities curve?
What will be an ideal response?
Suppose the economy is in long-run equilibrium. Senator A succeeds in getting taxes raised. At the same time, Senator B succeeds in getting major restrictions on logging removed. In the short run
a. real GDP will rise and the price level might rise, fall, or stay the same. b. real GDP will fall and the price level might rise, fall, or stay the same. c. the price level will rise, and real GDP might rise, fall, or stay the same. d. the price level will fall, and real GDP might rise, fall, or stay the same.
When a market consists of a few large firms and barriers to entry exist, it:
A. must be monopolistically competitive. B. is likely an oligopoly. C. is likely a monopoly. D. must be perfectly competitive.
The most glaring economic problem in the former Soviet Union was
A. a shortage of military goods. B. a surplus of military goods. C. a shortage of civilian goods. D. a surplus of civilian goods.