You love peanut butter. You hear on the news that 50 percent of the peanut crop in the South has been wiped out by drought and that this will cause the price of peanuts to double by the end of the year. As a result, your demand for peanut butter
a. will increase but not until the end of the year.
b. increases today.
c. decreases as you look for a substitute good.
d. shifts left today.
b
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Suppose the economy is initially at equilibrium, in which total planned real expenditures equals real GDP. Which of the following will occur if there is an increase in autonomous investment?
A) Inventories will decrease immediately and production of goods and services will increase until real GDP catches up with total planned real expenditures. B) Inventories will increase immediately and production of goods and services will decrease until real GDP catches up with total planned real expenditures. C) Inventories will not change and production of goods and services will not change either. D) Both inventories and production of goods and services will increase.
If land suitable for growing corn is also suitable for growing soybeans, and soybeans were found to prevent cancer,
A) the demand for corn would decrease. B) there would be no effect on the cost of growing corn. C) the supply (curve) of soybeans would increase. D) the cost of growing corn would rise. E) the cost of growing corn would fall.
There are two industries that emit sulfur dioxide. The government decides to use a cap-and-trade policy by issuing permits for pollution. If Harry's industry has a higher marginal cost of reducing sulfur dioxide than does Joe's industry, ________
A) the cap-and-trade policy will not make the amount of pollution efficient B) Joe's industry will sell permits to Harry's industry C) Harry's industry will sell permits to Joe's industry D) Harry's industry and Joe's industry will emit the same quantity of sulfur dioxide
In the simple quantity theory of money, Real GDP and velocity are assumed to be constant
Indicate whether the statement is true or false