The long run
A) means a long period of time, always longer than a year.
B) is a period of time in which all factors of production can be varied.
C) is different for different firms.
D) Both answers B and C are correct.
D
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The long-run adjustment to a negative supply shock results in
A) the price level rising. B) the short-run aggregate supply curve shifting to the right. C) workers being willing to accept higher wages. D) unemployment rising.
A dentist shares an office building with a radio station. The electrical current from the dentist's drill causes static in the radio broadcast, causing the radio station to lose $10,000 in profits. The radio station could put up a shield at a cost of $30,000 . the dentist could buy a new drill that causes less interference for $6,000 . Either would restore the radio station's lost profits. What
is the economically efficient outcome? a. The radio station puts up a shield, which it pays for. b. The radio station puts up a shield, which the dentist pays for. c. Neither the radio station nor the dentist purchase additional equipment. d. The dentist gets a new drill; it does not matter who pays for it.