People often complain about price gouging after a disaster such as a wildfire. Suppose the government successfully prevented price increases due to the disaster. We would expect
A. reconstruction to take less time because the demand for materials would increase faster.
B. reconstruction to take less time because the government could rebuild more quickly when people are not in the way.
C. reconstruction never to occur.
D. reconstruction to take longer because the quantity supplied of new materials would increase more slowly.
Answer: D
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Refer to the figure above. When the real exchange rate is below R*:
A) net exports are negative. B) net exports are positive. C) net exports can be positive or negative depending on the value of R*. D) net exports are zero.
Which of the following auction examples has a common value information structure?
A. An auction of a famous painting. B. Three firms bid for an oil lease. C. A college in need of money decides to name a building on campus after the person willing to pay the most for the privilege. D. An auction of a famous painting and a college in need of money decides to name a building on campus after the person willing to pay the most for the privilege.
Suppose that when the price of ice cream increases, Liza decreases her purchase of hot fudge. To Liza
A) ice cream is a normal good and hot fudge is an inferior good. B) ice cream and hot fudge and substitutes. C) ice cream and hot fudge are normal goods. D) ice cream and hot fudge are complements.
In the 2-factor, 2 good Heckscher-Ohlin model, the production possibility frontier is kinked when
A) there is no factor substitution in production. B) the opportunity cost of production is constant. C) there are unemployed factor resources. D) a country does not engage in trade. E) transportation costs are very high.