The apple market is perfectly competitive and is in long-run equilibrium. Now a disease kills 50 percent of the apple orchards. In the short run, the price of a bag of apples ________ and the remaining apple growers make ________ economic profit.
In the long run, the ________. A) increases; zero; price of apples will return to their original level
B) remains the same; zero; orchards will be replanted and growers will make normal profits
C) increases; zero; orchards will be replanted and economic profit will return to zero
D) increases; positive; orchards will be replanted and economic profit will return to zero
Ques. 2The Fed buys 50,000 of government securities from Commerce Bank. The desired reserve ratio is 25 percent. What is the change in Commerce Bank's total reserves and its excess reserves?
What will be an ideal response?
Ques. 3Among the United States, Finland, and South Africa, income is distributed most equally in ________ and least equally in ________.
A) the United States; South Africa
B) Finland; South Africa
C) Finland; the United States
D) South Africa; the United States
Ques. 4If a union is unable to increase the demand for its workers, then success at raising the wage rate paid its members means that
A) all union members receive a higher wage.
B) some union members will lose their jobs.
C) more union members will be hired.
D) the union will push for a decrease in the minimum wage.
Ques. 5The diamond-water paradox of value can be explained by
A) distinguishing between total utility and marginal utility.
B) water's high level of utility relative to diamonds.
C) water's low price relative to diamonds.
D) the fact that utility cannot be measured.
Quick Reply
