To conduct a partial equilibrium analysis of a change in consumer preferences toward coffee and away from tea, you must consider
A. changes in the amount of resources allocated to the production of coffee.
B. changes in the price of resources allocated to the production of coffee.
C. changes in the equilibrium price and quantity of coffee.
D. all of the above
Answer: D
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If the price of hair styling increases, then
A) hair styling salons hire fewer workers but makes more profit. B) hair stylists demand an increase in wages and the salons hire fewer workers. C) the value of marginal product of each hair stylist increases and the demand curve for hair stylists shifts leftward. D) the value of marginal product of each hair stylist increases and the demand curve for hair stylists shifts rightward.
If firms do not increase their quantity supplied when price changes, then supply is
A) elastic. B) perfectly inelastic. C) relatively inelastic. D) perfectly elastic.
Publications such as Consumer Reports magazine
a. increase the optimal amount of information gathered b. reduce the optimal amount of information gathered c. reduce the amount of common knowledge d. raise the marginal benefit of information curve e. make consumers perfectly informed
The more rapidly the government creates money to finance its budget deficits, the:
A. smaller the inflation tax and the greater the reduction in the real value of any assets specified in nominal terms. B. smaller the inflation tax and the smaller the reduction in the real value of any assets specified in nominal terms. C. greater the inflation tax and the smaller the reduction in the real value of any assets specified in nominal terms. D. greater the inflation tax and the greater the reduction in the real value of any assets specified in nominal terms.