The figure above shows the demand for fruit snacks. Which movement reflects how consumers would react to an increase in the price of a fruit snack that is expected to occur in the future?
A) from point a to point e
B) from point a to point b
C) from point a to point c
D) from point a to point d
D
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Limiting net external wealth effects could be accomplished by limiting movements in the exchange rate. What measure might address this situation?
A) devaluing the currency B) keeping nominal interest rates exactly 1% higher than one's trading partners C) borrowing only in U.S. dollars D) pegging the exchange rate to the currency of the largest creditor nation
Suppose that Brazil and Peru exchange coffee and leather. Brazil can produce both coffee and leather more efficiently than Peru, but Brazil can produce coffee more efficiently than leather. Comparative advantage states that:
A) Brazil should produce both coffee and leather and not trade. B) Brazil should produce coffee, Peru should produce leather, and both countries should trade. C) Brazil should produce leather, Peru should produce coffee, and both countries should trade. D) Peru should produce both coffee and leather and not trade.
According to comparative advantage, trade between two countries
A. maximizes the amount of inputs that are used in the production of all products. B. allows each of the trading countries to allocate its resources most efficiently. C. guarantees that consumption levels will be equal in the two countries. D. will benefit all the industries in each of the countries.
________ occurs when congressional representatives trade votes.
A. An injunction B. The voting paradox C. Logrolling D. Market failure