Suppose there is a temporary supply shock because of a war in the Middle East, then ________
A) this would constitute a cost push shock due to a restriction in the supply of oil
B) the AS curve would shift to the left
C) this could theoretically lead to stagflation
D) all of the above
E) none of the above
D
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Suppose penalties are imposed on both buyers and sellers of marijuana, but the cost of breaking the law to sellers is greater than that to buyers
This measure will ________ the equilibrium price of marijuana and ________ the equilibrium quantity of marijuana sold. A) lower; increase B) raise; increase C) raise; decrease D) not change; will decrease
Assume a firm is run as a zero-profit enterprise. Which of the following would be TRUE?
A) There is a higher probability that wage reductions would outweigh layoffs. B) Those in charge would not act any different than regular owners, there would still be layoffs. C) Those not in charge would remain risk neutral. D) Wage reductions would be lower than they would be if the firm was run for profit.