If a natural disaster were to cause a negative long-run supply shock to the economy, once the economy adjusts, the new equilibrium will be at a:
A. higher price level and lower level of output.
B. lower price level and lower level of output.
C. higher price level and higher level of output.
D. lower price level and higher level of output.
Answer: A
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A concentration ratio measures
A) the average size of the firms in the industry. B) the sales of the three largest firms in the industry minus the costs of these three largest firms in the industry. C) the share of industry sales accounted for by the largest firms in the industry. D) the excess capacity found in a particular oligopolistic industry.
Which set of items in the accompanying list would move an economy from a point inside its production possibilities curve to a point on its production possibilities curve?
1. Improvements in technology. 2. Increases in the supply (stock) of capital goods. 3. Purchases of expanding output. 4. Obtaining the optimal combination of goods, each at least-cost production. 5. Increases in the quantity and quality of natural resources. 6. Increases in the quantity and quality of human resources. A. 3 only B. 1, 3, and 4 only C. 1, 2, 5, and 6 only D. 3 and 4 only