As coffee becomes more expensive, Joe starts drinking tea, and therefore quantity demanded for coffee decreases. This is called:
A. the income effect.
B. the change in equilibrium.
C. the substitution effect.
D. a shift in the demand curve
Ans: C. the substitution effect.
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The farmer pays 20 cents for the seed that is sold to the miller for 35 cents;
A) $1 B) $2 C) $3 D) 35
The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource. To correct for this problem, the town could
a. allow individual shepherds to choose their own flock sizes. b. internalize the externality by subsidizing the production of sheep's wool. c. auction off a limited number of sheep-grazing permits. d. wait until the market corrects the problem.
Which one of the following occurred during the 2002 labor dispute between the International Longshore and Warehouse Union and the employers at 29 West Coast ports?
A. President Bush invoked the Taft-Hartley Act. B. Workers engaged in a month-long work slowdown. C. The union got a guaranty of lifetime employment for those whose jobs were in jeopardy and a substantial pay increase. D. All of the choices are correct.
Comparative advantage is defined as
A. the ability to produce more output from given inputs of resources than others can. B. the ability to use more input of resources than others can. C. having a lower average fixed cost in the production of a good than does someone else. D. the ability to produce more output of one good relative to another good than another country can.