Two studies published in the New England Journal of Medicine link the risk of breast cancer to alcohol consumption. Young women who have nine drinks per week were reportedly 150 percent more likely to develop breast cancer. Considering the market for alcohol, an economist would predict a movement
a. up the demand curve as quantity demanded falls.
b. up the supply curve as the demand curve shifts.
c. down the supply curve as the demand curve shifts.
d. down the demand curve as quantity falls.
c
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Suppose there is a technology to produce Grendels such that there are diseconomies of scale after the first unit is produced. There are both fixed (a physical plant called a lair) and variable (food that grows in lairs) costs of production. Which statement is true? a. No Grendels will be produced. b. Producing multiple units increases the average fixed cost. c. There will be no more than one
firm in this industry. d. It is cheaper to make five Grendels by buying five lairs and producing one Grendel in each lair than it is to produce five Grendels in one lair. e. This is an impossible situation.
An increase in demand will cause
a. an increase in supply. b. a decrease in supply. c. an increase in quantity supplied. d. a decrease in quantity supplied. e. a decrease in equilibrium price.
The law of comparative advantage explains why
A) countries but not individuals can benefit from specializing in the activities they do best. B) individuals as well as countries can benefit from specializing in the activities they do best. C) neither individuals nor countries can benefit from specializing in the activities they do best. D) individuals but not countries can benefit from specializing in the activities they do best.
The alternative to voluntary exchange is:
A. self-sufficiency B. dependency C. cooperation D. marginal analysis.