A pest attack destroys half of the California navel orange crop. Simultaneously, the price of kiwi fruit, a substitute for navel oranges, falls. How would you expect these two events to affect the equilibrium in the California navel orange market?
a. The demand for navel oranges would decrease but the supply would remain unchanged, resulting in a lower market equilibrium price and quantity.
b. The supply would decrease and the demand would increase, resulting in a higher market equilibrium price and an indeterminate change in market equilibrium quantity.
c. Both supply and demand would decrease, resulting in a decrease in equilibrium quantity and an indeterminate change in price.
d. Both supply and demand would increase, resulting in an increase in equilibrium quantity and an indeterminate change in price.
c
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If a country's currency is "pegged" to the dollar, its exchange rate is
A) floating. B) flexible. C) undervalued. D) fixed.
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.
Economists consider rent seeking activity to be highly productive.
Answer the following statement true (T) or false (F)
The consumer price index is calculated by the:
A. National Bureau of Economic Research. B. Congressional Budget Office. C. Social Security Office. D. Bureau of Labor Statistics.