The price of wheat used to make cereal has increased. At the same time, the price of milk (a compliment good) has decreased. Given these two events, what do you expect to happen to the equilibrium price and quantity of cereal?
What will be an ideal response?
Equilibrium price will increase, the effect on quantity is ambiguous.
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Technical analysts in the financial markets are those who
a. believe that markets always operate efficiently. b. look for stocks to buy based on the degree to which the company is investing in technology. c. argue that a careful study of past prices of a given stock conveys useful information about future prices. d. base their analyses on the current state of the macroeconomy.
A currency appreciation is disinflationary and contractionary if the
A. inward shift of the aggregate demand curve due to the fall in exports exceeds the outward shift of the aggregate supply curve due to lower input prices. B. outward shift of the aggregate demand curve due to the rise in exports exceeds the outward shift of the aggregate supply curve due to lower input prices. C. outward shift of the aggregate demand curve due to the fall in exports exceeds the inward shift of the aggregate supply curve due to higher input prices. D. inward shift of the aggregate demand curve due to lower input prices exceeds the outward shift of the aggregate supply curve due to the rise in exports.
Refer to Scenario 14.4. Suppose that a pollution tax is imposed on each unit of a firm's output. The number of workers hired
A) will decrease. B) will increase. C) will not change. D) will change in an indeterminate fashion.
For a firm to maximize total profits through price discrimination, it should
a. Charge a high price to consumers with an inelastic demand and low price to consumers with an elastic demand b. Charge a low price to consumers with an inelastic demand and high price to consumers with an elastic demand c. Charge the same price to both sets of consumers d. Charge nothing to both set of consumers-throw a party