If a hurricane were to wipe out the majority of the eastern seaboard in the United States, it would likely cause a:
A. short-run supply shock.
B. long-run supply shock.
C. long-run demand shock.
D. short-run demand shock.
Answer: B
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To get the first order conditions in a profit maximization problem, we must ________
A) set the profit function equal to zero and solve for the production function B) set the partial derivatives of the production function equal to zero and solve for the price C) set the partial derivative of the profit function equal to zero and solve for the marginal products D) set the production function equal to zero and solve for the marginal products E) none of the above
Which of the following is a correct conclusion regarding the successful implementation of fiscal policy?
a. Successful fiscal policy would be easy to achieve if Congress would stay out of the economy and permit natural market forces to restore full-employment equilibrium. b. Successful fiscal policy is difficult to achieve because in the real world the investment, net exports, and consumption schedules are constantly shifting. c. Successful fiscal policy is much easier to achieve today because econometric models make economic forecasting much easier. d. As the income-expenditure model suggests, fiscal policy planners can move GDP to any level they please by changing tax and spending levels.
When competition is present and private ownership rights are clearly defined and securely enforced by the legal system, business firms will have a strong incentive to
a. innovate and develop better products and lower cost production methods. b. spend time attempting to plunder (take) the resources of others. c. engage in wasteful activities that increase the cost of producing goods and services. d. use resources during the current period rather than conserving them for the future.
If Crusoe and Friday want to maximize their consumption possibilities,
What will be an ideal response?