Hurricane Katrina damaged a large portion of refining and pipeline capacity when it swept through the Gulf coast states in August 2005. As a result of this, many gasoline distributors were not able to maintain normal deliveries. At the pre-hurricane
equilibrium price (i.e., at the initial equilibrium price), we would expect to see
A) a surplus of gasoline.
B) the quantity demanded equal to the quantity supplied.
C) a shortage of gasoline.
D) an increase in the demand for gasoline.
Answer: C
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All else equal and given the current system of exchange rates, if the United States enters a period of exceptionally strong growth,
A) the pressure on the dollar is to revalue. B) the pressure on the dollar is to devalue. C) the pressure on the dollar is to depreciate. D) the pressure on the dollar is to appreciate. E) Both A and D.
Data on the U.S. income distribution suggest that
a. black-white income differentials have decreased b. black-white income differentials have increased c. the distribution of income among blacks is more uneven than the overall distribution of income d. the distribution of income among blacks is less uneven than the overall distribution of income e. the distribution of income among blacks follows approximately the same pattern as the overall distribution of income
The classical approach to a downturn in the business cycle was for the government to do nothing
a. True b. False Indicate whether the statement is true or false
Darlene runs a fruit and vegetable stand in a medium-sized community where there are many such stands. Her weekly total revenue equals $3,500 . Her weekly total cost of running the stand equals $3,500, consisting of $2,500 of variable costs and $1,000 of fixed costs. An economist would likely advise Darlene to: a. shut down as quickly as possible because the stand is generating losses
b. keep the stand open because it is generating a normal profit. c. keep the stand open for a while longer because she is covering all of her variable costs and some of her fixed costs. d. keep the stand open for a while longer because she is covering all of her fixed costs and some of her variable costs.