Discuss the correct and incorrect economic analysis in the following statements
"If a disease kills a large number of turkeys, the supply of turkeys will decrease.
This will result in a price increase, which will then cause the supply of turkeys to increase."
The supply of turkeys will decrease resulting in a higher equilibrium price and a lower equilibrium quantity but the higher price will not shift the supply curve for turkeys.
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Which of the following statements is a major criticism of a pure monopoly as a source of allocative inefficiency?
A. A pure monopoly fails to expand output to the level where the price of an additional unit is just equal to its marginal cost. B. A pure monopoly will always generate economic profit, and that means that prices are too high. C. A pure monopoly has an unfair advantage because it can purchase labor at a lower price than perfectly competitive firms can. D. A pure monopoly has no incentive to produce efficiently, because even the inefficient pure monopoly can be assured of economic profits.
Refer to Table 1-2. Using marginal analysis, how many hours should Julius extend his shop's hours of operations?
A) 2 hours B) 3 hours C) 4 hours D) 5 hours E) 6 hours
________: level of input use where the marginal value product equals the marginal input cost
Fill in the blank(s) with correct word
Answer the following questions true (T) or false (F)
1. Externalities always arise because of a failure of transferability. 2. The capitalized value of a constant stream of $20 per year given an interest rate of 4% per year is $800. 3. The prior appropriation doctrine is a system in which individuals have rights to specific quantities of water and these right can be sold to others.