If a natural disaster were to cause a negative long-run supply shock to the economy, once the economy adjusts, the new equilibrium will be at a:
A. higher price level and lower level of output.
B. lower price level and lower level of output.
C. higher price level and higher level of output.
D. lower price level and higher level of output.
Answer: A
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The total interest that a borrower has to pay on a loan is equal to the:
A) principal plus the rate of interest. B) principal divided by the rate of interest. C) principal minus the rate of interest. D) principal times the rate of interest.
The study of the problems due to asymmetric information was begun when economists analyzed which type of market?
A) the market for automobiles B) farmers' markets C) the market for insurance D) the market for citrus fruit
How does the imposition of a tariff reduce the price of imports?
a. At the lower quantity supplied, the price to the importer is lower than if there were free trade. b. At the lower quantity demanded, the price to the importer is lower than if there were free trade. c. Supply of the product is increased from domestic production, reducing the price of the imports. d. Demand for the product is decreased, so that price must fall.
The consumer's optimum choice is represented by
a. MUx/MUy = Px/Py. b. MUx/Px = MUy/Py. c. MRSxy = Px/Py. d. All of the above are correct.