Which of the following would cause the equilibrium price of white bread to decrease and the equilibrium quantity of white bread to increase?
A) a decrease in the price of flour
B) an increase in the price of rye bread, a substitute for white bread
C) an increase in the price of butter, a complement for white bread
D) an increase in the price of flour
A
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The infant-industry argument is the only perfectly valid argument for protection
Indicate whether the statement is true or false
A payment for a resource above its opportunity cost is known as: a. an interest payment. b. a sunk cost
c. featherbedding. d. an economic rent.
An important difference between perfect competition and monopoly is
A. the monopoly faces an inelastic demand curve and the perfect competitor faces an elastic demand curve. B. a monopoly is profitable and a perfect competitor is not. C. a monopoly is not regulated by the market, while a perfect competitor is regulated by the market. D. the monopoly faces a downward sloping demand curve and the perfect competitor faces a horizontal demand curve.
Governments may use microeconomic models to study the effects of a new tax on
A) the prices consumers pay. B) the money supply. C) the prices charged by producers. D) A and C