Select the letter of the diagram in Figure 28.1 that best represents the effect of each event on the United States wheat market, ceteris paribus: A bumper wheat crop in the midwest. (See Figure 29.4.)
A. a.
B. b.
C. c.
D. d.
Answer: B
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An increase in supply will cause equilibrium price to __________ and equilibrium quantity to __________
a. increase; increase b. increase; decrease c. decrease; increase d. decrease; decrease e. remain constant; increase
An economist would say the price is too high for a certain service if
A. poor people couldn’t afford to buy it. B. nobody could afford to buy it. C. the price was above marginal cost. D. it is an essential service and consumes a significant share of income.
Two advisors to the president have given their policy recommendations, and they are in disagreement. Why do these economists disagree?
a. because they do not have all relevant information about the problem b. because they disagree on the nature of some cause-effect relationship c. because they have different values and opinions d. All of the above are reasons for disagreements among economists.
Goods that are rival in consumption and excludable would be considered
a. club goods. b. common resources. c. public goods. d. private goods.