Using the supply and demand model, what is the best way to show the effects on the plywood market of households preparing for a hurricane? (Note: people use plywood to board up their homes to protect them from damage from a hurricane.)
A. Supply curve moved right and demand curve shifted to the left.
B. Both supply and demand curves shifted to the right.
C. Supply curve shifted to the right, demand curve did not shift.
D. Demand curve shifted to the right, supply curve did not shift.
Answer: D
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The more successful a seller is in inducing buyers to pay the maximum price they would be willing to pay rather than do without the good, the
A) closer will the seller's marginal revenue curve come to the demand curve. B) greater will be the demand for the good. C) more elastic will be the demand for the good. D) more inelastic will be the demand for the good.
Since foreign credit dries up in crises when it is most needed, developing countries can protect themselves from default by
A) cutting off imports of goods. B) allowing the exchange rate to float. C) using equity finance only. D) accumulating high levels of international reserves. E) avoiding the international capital market.