Purchase Solution

Beneficial and adverse supply shocks

Not what you're looking for?

Ask Custom Question

What are supply shocks? Distinguish between beneficial and adverse supply shocks. Do such shocks affect the short-run supply curve, the long-run supply curve, or both? What is the resulting impact on potential GDP?

Purchase this Solution

Solution Summary

The solution distinguishes between beneficial and adverse supply shocks.

Solution Preview

Supply shock: A disruption of market equilibrium caused by a change in a supply determinant and a shift of the supply curve. A supply shock can take one of two forms--a supply increase or a supply decrease. This is one of two disruptions of the market. The other is a demand shock.

A supply shock to the market results when the supply curve is shifted due to a change in one of the five supply determinants--resource prices, production technology, ...

Purchase this Solution

Free BrainMass Quizzes
Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.