Which of the above diagrams illustrate(s) the effect of an increase in the price of Budweiser beer on the market for Coors beer?
A. A only
B. B only
C. C only
D. A and C
Answer: A
You might also like to view...
Suppose inflation comes in the form of an across-the board increase in all prices by some percentage k. For a consumer with exogenous income operating in a 2-good world, this will cause the budget constraint to
A. rotate inward B. rotate outward C. shift out in a parallel way D. shift inward in a parallel way E. none of the above
Assume an automobile manufacturer can sell its sport utility vehicle (SUV) with or without a trailer towing package. One group of customers, group A, is willing to pay a maximum of $30,000 for the SUV and $1,100 for the towing package
A second group, B, is willing to pay $29,000 for the SUV and $1,000 for the towing package. Assuming the manufacturer cannot price discriminate, to maximize its revenues the manufacturer should: A) sell the components separately, charging $30,000 for the SUV and $1,000 for the towing package. B) sell the components separately, charging $29,000 for the SUV and $1,100 for the towing package. C) sell the components separately, charging $29,000 for the SUV and $1,000 for the towing package. D) sell the components as a bundle for $30,500.
Suppose the real money demand function is
Md/P = 2400 + 0.2Y - 10,000 (r + ?e). Assume M = 5000, ?e = .03, and Y = 5000. If the price level were to decrease from 2.5 to 2.0, then the real interest rate would decrease by how many percentage points (assuming Md, ?e, and Y are unchanged)? A) 4 B) 5 C) 9 D) 14
The equilibrium rent for marginal land
a. equals zero. b. depends on the supply and demand of land. c. exceeds the opportunity cost of the land. d. is always greater than the equilibrium rent for nonmarginal land.