Bacon is used to produce bacon cheeseburgers, and the price of bacon decreases. In the market for bacon cheeseburgers you would expect that
A. the supply of bacon cheeseburgers would decrease and the price of bacon cheeseburgers would increase.
B. the demand for bacon cheeseburgers would decrease and the price of bacon cheeseburgers would fall.
C. the supply of bacon cheeseburgers would increase and the price of bacon cheeseburgers would decrease.
D. the demand for bacon cheeseburgers would increase and the price of bacon cheeseburgers would increase.
Answer: C
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If you buy a five-year-old TV from a friend, the amount you paid for the TV is
A) always added to consumption expenditures but not investment. B) always added to investment but not consumption. C) not included in this year's GDP. D) added to investment if the TV is expected to last more than 5 additional years and added to consumption if the TV is expected to last less than 5 additional years. E) included in this year's GDP only if the TV set was manufactured in the United States.
The cross elasticity of demand is calculated as the percentage change in the
A) quantity demanded of one good divided by the percentage change in the price of another good B) price of one good divided by the percentage change in the quantity demanded of another good. C) quantity demanded of one good divided by the percentage change in the quantity demanded of another good. D) price of one good divided by the percentage change in the price of another good.
Refer to Figure 2-14. Which country has a comparative advantage in the production of snow cones?
A) Greenland B) They have equal productive abilities. C) Iceland D) neither country
Consider an open economy that is a net borrower (like the United States). What would be the impact of a shift to a closed economy?
A) domestic interest rates would decline B) domestic savings would decline C) domestic investment would decline D) net borrowing would increase