A year-long drought that destroys most of the summer's crops would be considered a:
A. short-run supply shock.
B. long-run demand shock.
C. long-run supply shock.
D. short-run demand shock.
Answer: A
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The marginal utilities associated with the first 5 units of consumption of good Y are 15, 15, 10, 7, and 3, respectively. What is the total utility associated with those 5 units?
a. 5. b. ?12. c. 12. d. 35. e. 50.
A pegged rate system that includes policy cooperation is usually:
A) difficult to maintain. B) a good compromise for nations who want exchange rate stability, stable output, and some flexibility. C) not a good bet for nations who are large trading partners. D) administered by large private banks.
When a nation chooses to fix or float, it should consider:
A) only its domestic banks, importers, and exporters. B) only whether it has a great deal of economic integration. C) only whether it has similar circumstances in terms of demand or supply shocks with its trading partners. D) both the level of economic integration and the similarity of demand or supply shocks.
This graph shows the marginal cost and marginal benefit associated with roadside litter clean up. Assume that the marginal benefit curve and marginal cost curve each have their usual slope.
Suppose the state highway department has picked up 15 bags of litter. Protesters have staged a demonstration demanding that the highway department return to pick up the remaining litter. From an economic efficiency perspective, the protesters have a ________ claim because ________.
A. legitimate; litter generates a negative externality B. faulty; the government is not responsible for taking care of private property C. faulty; the additional resources needed to remove more litter could be better used elsewhere D. legitimate; the government has a responsibility to take action when private market incentives do not yield the socially optimal outcome