A year-long drought that destroys most of the summer's crops would be considered a:
A. short-run supply shock.
B. long-run demand shock.
C. long-run supply shock.
D. short-run demand shock.
Answer: A
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When economists say an individual has made a rational choice, they mean the individual has
a. made the choice by weighing their own subjective costs and benefits. b. made a "good" decision, one that reasonable outside observers would have also made. c. neglected to consider the unintended consequences arising from their decision. d. ignored their own personal interests and made the choice that is best for society.
A firm is using a single variable input, labor, with a given amount of a fixed input, capital. If the level of capital is decreased,
A. the average product curve of labor curve shifts downward. B. the total product curve of labor curve shifts downward. C. the marginal product curve of labor shifts downward. D. all of the above E. none of the above