This year a new oil field with substantial reserves has been discovered. Such discoveries are not made every year. Therefore an increase in the demand for oil will:
A) increase the long-run price of oil more than the short-run price of oil.
B) increase the long-run price of oil less than the short-run price of oil.
C) ensure the long-run price of oil and short-run price of oil increase by the same amount.
D) ensure that the short-run price of oil falls.
E) ensure that the short-run price of oil remains unchanged.
B
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Refer to Figure 11.1. Assume the economy is in equilibrium at 1 = 0. Other things equal, a negative demand shock such as the financial crisis of 2007-2009 would result in a movement from point ________ to point ________
A) A; B B) B; A C) A; C D) A; D
Refer to the above figure. Excess quantity supplied will exist when
A) the price is between $0 and $6. B) the price equals $6. C) the price equals $10. D) quantity demanded equals 15.
The invention of machinery that can double the amount of gold extracted from raw ore will likely lead mining companies to
a. raise the world price of gold to pay for the new machinery. b. lower the world price of gold because any amount can now be produced more cheaply. c. raise the world price of gold because miners' wages must double as their productivity doubles. d. lower the world price of gold only if new mining companies are not allowed to enter the industry.
A transfer payment is
a. a payment for moving expenses a worker receives when he or she is transferred by an employer to a new location. b. a payment that is automatically transferred from your bank account to pay a bill or some other obligation. c. a form of government spending that is not made in exchange for a currently produced good or service. d. the benefit that a person receives from an expenditure by government minus the taxes that were collected by government to fund that expenditure.