In 2012 a severe drought raised the price of corn. For a farmer in Canada who harvested a normal crop because the farm was not affected directly by the drought, the increase in the price of corn
A) increases the farmer's producer surplus.
B) decreases the farmer's producer surplus.
C) does not affect the producer surplus because this change is a movement along the farmer's supply curve and not a shift of the farmer's supply curve.
D) increases producer surplus only if the farmer's supply is completely inelastic.
A
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Which of the following is NOT a cost of inflation?
A) uncertainty cost B) confusion cost C) tax cost D) unemployment cost E) shoe-leather cost
If the price of crude oil falls, the equilibrium price of gasoline ________ and the equilibrium quantity ________
A) rises; increases B) rises; decreases C) falls; increases D) falls; decreases
When government borrowing decreases private investment by raising the market interest rate, this is known as
A. the Director's Law. B. crowding out. C. positive economics. D. the Ramsey Rule.
Through 2012, the most serious U.S. trough since the Great Depression was the one that occurred in
a. 1991. b. 2001. c. 1974–1975. d. 2008–2010.