Assume the demand for coffee increases and the supply of coffee decreases. Which of the following outcomes is certain to occur?
A. The equilibrium price of coffee will fall.
B. The equilibrium price of coffee will rise.
C. The equilibrium quantity of coffee will fall.
D. The equilibrium quantity of coffee will rise.
Answer: B
You might also like to view...
Bananaland produces only bananas and sunscreen and the quantities and prices for 2012 and 2013 are given in the table above. The base year is 2012. Nominal GDP in 2012 is equal to
A) $500. B) $625. C) $640. D) $800. E) $100.
If in a perfectly competitive industry, the market price facing a firm is below its average total cost but above average variable cost at the output where marginal cost equals marginal revenue
A) the industry supply will not change. B) firms are breaking even. C) some existing firms will exit the industry. D) new firms are attracted to the industry.
If a good has an income elasticity of demand greater than 1, one might classify that good as
A) a necessity. B) a luxury. C) unusual. D) inelastic.
Complete crowding out implies that as government increases purchases by $1,
A) private spending decreases by $1. B) Real GDP remains unchanged. C) there is an equal offsetting decrease in one or more of the components of private expenditures. D) all of the above E) none of the above