Suppose you observe an increase in the equilibrium price of coffee and a decrease in the equilibrium quantity of coffee. Of the options listed below, this is most consistent with:
A. an increase in the cost of producing coffee.
B. a decrease in consumer income assuming coffee is a normal good.
C. an increase in consumer income assuming coffee is a normal good.
D. a decrease in the cost of producing coffee.
Answer: A
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During last year the price of regular unleaded gasoline in Oakland, California increased 11.0 percent. If the price elasticity of demand for gasoline was 0.13, the price hike means that the quantity demanded decreased by
A) 1.43 percent. B) 8.46 percent. C) 0.16 percent. D) 4.31 percent. E) 6.46 percent.
The idea that tradeoffs have to be made when resources are scarce is reflected in the fact that:
A. the slope of a linear production possibilities is constant. B. the production possibilities curve has a negative slope. C. points below the production possibilities curve are efficient. D. points below the production possibilities curve are inefficient.
Ceteris paribus is:
A. the Latin term for "all other things being the same." B. often used by economists to isolate the effect of a multiple changes that are important. C. only necessary for the definition of the law of demand. D. the Latin term for "as things change only consider these changes".
Total satisfaction is maximized when
A. marginal utility is zero. B. marginal utility is negative. C. marginal utility is equal to average utility. D. marginal utility is positive.