A terrible storm wipes out 70 percent of the peanut crop. Explain and show graphically how this will affect the market for peanut butter and the market for jelly, a complementary good
Higher peanut prices will shift the supply curve for peanut butter to the left (a decrease in supply). A higher price and a lower quantity demanded will result. The demand for jelly will decrease in response to higher peanut butter prices. This leftward shift in the demand curve will reduce the price of jelly and the quantity supplied.
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If the Fed were to raise the required reserve ratio,
A) excess reserves would decrease. B) excess reserves would increase. C) there would be no effect on the level of excess reserves. D) there would tend to be no effect on the nation's money supply.
Hyperinflation can be defined as an inflation rate of
A) 50% or more per month. B) 50% or more per year. C) 50% or more decade. D) All of the above are appropriately defined as hyperinflation.
Mary says she plans to return to college next semester assuming her car keeps running, tuition fees don't go up, and her daycare provider continues to be dependable. An economist would say that Mary plans to return to college next semester
A) caveat emptor. B) ceteris paribus. C) laissez faire. D) ipso facto.
The neighborhood ice cream shop finds that when it charges $3 per ice cream cone, its total revenues are $90,000 . It has total variable costs of $30,000 and total fixed costs of $40,000 . From this we can infer the:
a. shop should be moved because the rent is too high. b. price is less than average total cost. c. economic profits are $20,000. d. shop will be closed in the long run. e. shop sells 10,000 ice cream cones.