Which of the following accurately describes an effect of hurricane Katrina on GDP?
A) GDP would increase reflecting the decrease in production that occurred during the storm and the productive capacity lost in the storm.
B) GDP would increase well-being.
C) GDP would increase reflecting the costs of cleanup.
D) GDP would decrease reflecting the costs of cleanup.
C
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Minimum wage laws:
A) can cause the quantity demanded to exceed the quantity supplied of labor. B) are used to solve the problem of wage rigidity. C) can give rise to wage rigidity. D) help in equating the quantity of labor demanded and supplied.
Which of the following would not occur as a result of a monopolistically competitive firm suffering a short-run economic loss?
A) The firm could exit the industry in the long run. B) If the firm does not exit the industry in the long run its demand curve will shift to the left. C) If the firm does not exit the industry in the long run its demand curve will shift to the right. D) If the firm remains in the industry in the long run it will break even.