An economy in which output has decreased and prices have increased would suggest that there has been a:
A. negative demand side shock.
B. negative supply side shock.
C. positive demand side shock.
D. positive supply side shock.
Answer: B
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If you bought a long contract on financial futures you hope that interest rates
A) rise. B) fall. C) are stable. D) fluctuate.
The monopolist's supply curve
A) doesn't exist. B) is the region of its marginal cost curve above average cost. C) is identical to the demand curve. D) is the region of its marginal cost curve that lies above the marginal revenue curve.
In a principal/agent relationship, _____ can help to reduce the damage caused by a winner's curse, provided both the parties are well-informed
a. signals b. warranties c. disclosure d. renegotiation
Suppose a monopolist's demand curve lies below its average variable cost curve. The firm will:
a. earn an economic profit. b. stay in operation in the short-run. c. shut down. d. earn an economic profit in the long run.