Suppose you are the manager of Natural Oils, a firm that specializes in healthy skin oils. To make your oils, you purchase avocado pits from guacamole manufacturers. If the demand for guacamole increases, this will cause the production of avocado pits to ________ and the price of avocado pits to ________.
A) increase; fall
B) decrease; fall
C) increase; rise
D) decrease; rise
A) increase; fall
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According to rational expectations theory,
A) increasing the money supply to reduce unemployment will always be successful. B) decreasing the money supply to reduce unemployment will usually be successful. C) increasing the money supply to reduce unemployment will not be successful because of an offsetting decrease in prices. D) increasing the money supply to reduce unemployment will not be successful because of an offsetting increase in prices.
According the graph shown, the firm's most efficient scale of operation is to produce quantity:
This graph represents the cost and revenue curves of a firm in a perfectly competitive market.
A. Q1.
B. Q2.
C. Q3.
D. Any quantity as long as P1 is charged.
The principal of a loan is the:
A. original amount of the loan. B. set of rules and conditions borrowers agree to when taking out a loan. C. set of rules and conditions savers agree to when agreeing to let someone borrow their money. D. original amount that people want to borrow.
In the backward-bending portion of a labor supply curve: a. a worker will increase the quantity of labor supplied in response to an increase in the wage. b. the substitution effect of a wage change outweighs the income effect
c. the income effect of a wage change outweighs the substitution effect. d. the substitution effect of a wage change equals the income effect.