Suppose that in October the price of a cup of cafe latte was $2.50 and 400 lattes were consumed. In November the price of a latte was $2.00 and 300 lattes were consumed. What might have caused this change?
A. The price of tea (a substitute for cafe lattes) fell.
B. The price of tea (a substitute for cafe lattes) rose.
C. The price of coffee beans (an input of production of cafe lattes) rose.
D. The price of coffee beans (an input of production of cafe lattes) fell.
Answer: A
You might also like to view...
The MPC is 0.90 and there are no income taxes or imports. If government expenditures on goods and services increases by $2.0 billion, after the multiplier effect works out, aggregate expenditure increases by
A) $2.22 billion. B) $2.0 billion. C) $10 billion. D) $20 billion. E) $1.8 billion.
"The Federal Open Market Committee (FOMC) is the group within the Federal Reserve that makes monetary policy decisions. The FOMC meets twice a year and each meeting lasts eight days." Are these two statements correct or incorrect? Why?
What will be an ideal response?
In the above figure, if d1 is the relevant demand curve for this firm, then which level of output will maximize this firm's profits or minimize its losses?
A. A B. B C. C D. D
The consumption schedule directly relates:
A. consumption to the level of disposable income. B. saving to the level of disposable income. C. disposable income to domestic income. D. consumption to saving.