Michael Scarn purchased a Personal Auto Policy (PAP) that included collision coverage. Michael lost control of his vehicle while driving home from a disappointing visit to a local beet farm. Excess beet juice on his tires caused him to skid across the median and into oncoming traffic. Another vehicle hit his car, causing severe damage to both. Ignoring any deductible, which of the following is true about the insurer's financial obligation for damage to Michael's car? I. It will pay an amount equal to the greater of ACV or what is necessary to repair or replace Michael's car.
II. The amount paid depends on whether he is determined to be at fault.

a. I only
b. II only
c. I & II
d. neither I nor II

6. why the aggregate supply curve slopes upward in the short run in the short run, the quantity of output that firms supply can deviate from the natural level of output if the actual price level in the economy deviates from the expected price level. several theories explain how this might happen. for example, the misperceptions theory asserts that changes in the price level can temporarily mislead firms about what is happening to their output prices. consider a soybean farmer who expects a price level of 100 in the coming year. if the actual price level turns out to be 90, soybean prices will , and if the farmer mistakenly assumes that the price of soybeans declined relative to other prices of goods and services, she will respond by the quantity of soybeans supplied. if other producers in this economy mistake changes in the price level for changes in their relative prices, the unexpected decrease in the price level causes the quantity of output supplied to the natural level of output in the short run.