If the price of mozzarella cheese (an ingredient in pizzas) declines due to a major technological breakthrough in the dairy industry, there would be:
A) a decrease in the supply of pizza.
B) an increase in the supply of pizza.
C) an increase in the quantity of pizza supplied.
D) no change in the supply of pizza.
Ans: B) an increase in the supply of pizza.
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The economy's ability to coordinate economic activity is hindered by
A) auction prices. B) workers whose wages change quickly. C) sticky wages causing sticky prices. D) all of the above.
The gains from trade within a price system is
A) the sum of consumer surplus and producer surplus. B) consumer surplus less producer surplus. C) consumer surplus divided by producer surplus. D) consumer surplus multiplied by producer surplus.
Assume that peanut butter and jelly are complementary goods. A decrease in the number of peanut butter suppliers will cause the
a. demand for peanut butter to increase b. supply of peanut butter to increase c. demand for jelly to increase d. demand for jelly to decrease e. supply of jelly to decrease
A subprime mortgage loan is a loan granted to persons who
A) have unusually good credit ratings and who represent a very low risk of default on the debt repayment. B) are borrowing funds to purchase a business, rather than a home. C) might have low credit ratings or some other factors that lead lenders to believe that they could default on the debt repayment. D) work for the government, rather than those who work in the private sector.