]Which of the following describes what would happen after a positive supply shock such as a decrease in world oil prices?
a. An upward shift of the aggregate supply curve as unit costs increase, followed by a gradual decrease in the wage as employment decreases, leading to a downward shift of the aggregate supply curve.
b. A downward shift of the aggregate supply curve as unit costs decrease, followed by a gradual increase in the wage as employment increases, leading to an upward shift of the aggregate supply curve.
c. An upward shift of the aggregate supply curve as unit costs increase, followed by a gradual decrease in the wage as employment decreases, leading to an upward shift of the aggregate supply curve.
d. A downward shift of the aggregate supply curve as unit costs decrease, followed by a gradual decrease in the wage as employment decreases, leading to a downward shift of the aggregate supply curve.
e. An upward shift of the aggregate demand curve.
B
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Suppose that there is a negative externality associated with alcohol consumption in the United States. Will the United States be better or worse off if it eliminates all tariffs on alcohol imports?
a. The United States will always be better off when tariffs on imported alcohol are eliminated. b. The United States will always be worse off when tariffs on imported alcohol are eliminated. c. The United States will be no better or worse off when tariffs on imported alcohol are eliminated. d. The United States will be better off only if the private gains from trade exceed the increased social costs of alcohol consumption when tariffs on imported alcohol are eliminated.
A strategy game is
a. any pricing competition among firms b. a situation arising from independent decision making among economic participants c. interpendent choice behavior by individuals or groups who share a common goal d. none of the above