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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A monopolist's profit-maximizing price and output correspond to the point on a graph
A) where total costs are the smallest relative to price. B) where marginal revenue equals marginal cost and charging the price on the market demand curve for that output. C) where average total cost is minimized. D) where price is as high as possible.
The ruling in the shrimp-turtle case resulted in:
a. the United States being able to ban shrimp caught with nets unsafe for sea turtles. b. the WTO upholding the environmental standard but ruling against the United States on technical grounds that it did not provide sufficient notice; after negotiation, however, the WTO reversed its decision. c. the WTO refusing to hear the case. d. a ruling that upheld the environmental standard.
Goods that have spillover costs affect our collective well-being and therefore can be overproduced because
A. Most businesses are more concerned about profits than how the environment is affected. B. The government has failed to establish rules for contracts. C. The government is concerned about broad economic welfare. D. The government has failed to enforce contract provisions.
The average expected rate of return of a financial asset equals:
A. the rate that compensates for time preference plus the rate that compensates for risk. B. the rate that compensates for time preference plus the rate of inflation. C. beta plus the rate that compensates for risk. D. the risk-free interest rate plus the rate of inflation.