The demand for microwaves in a certain country is given by: D = 8,000 -30P, where P is the price of a microwave. Supply by domestic microwave producers is: S = 4,000 + 10P. If this economy opens to trade while the world price of a microwave is $50, how many microwaves will be imported or exported?

In the early 2000s the European Central Bank warned that higher oil prices were a threat to economic growth. The Bank President called the higher prices "a sizeable adverse shock" to the economy. In terms of the AS/AD framework, this shock would be represented as a shift:

A. right of the AD curve. B. down (to the right) of the AS curve. C. up (to the left) of the AS curve. D. left of the AD curve.

A positive externality exists and government wants to apply a per-unit subsidy in order to bring about an efficient outcome. Under what condition will the solution (the subsidy) be worse than the problem (the market failure)?

A) Under the condition that the subsidy is greater than the marginal external benefit (associated with the positive externality). B) Under the condition that the post-subsidy output is not farther away from the efficient level of output than the pre-subsidy output is from the efficient level of output. C) Under the condition that the post-subsidy output is farther away from the efficient level of output than the pre-subsidy output is from the efficient level of output. D) Under the condition that the subsidy is less than the marginal external benefit (associated with the positive externality). E) none of the above