Assume the demand for coffee increases and the supply of coffee decreases. Which of the following outcomes is certain to occur?
A. The equilibrium quantity of coffee will fall.
B. The equilibrium price of coffee will fall.
C. The equilibrium price of coffee will rise.
D. The equilibrium quantity of coffee will rise.
Answer: C
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One reason that we might observe a rise in net capital outflow could be interest rates in the:
A. rest of the world are declining, relative to the U.S. B. U.S. are declining, relative to the rest of the world. C. U.S. and the world are all declining. D. U.S. and the world are all increasing.
When the Federal Reserve increases the money supply, it has the immediate effect of creating wealth
a. True b. False
The opportunity cost of holding money is
A) the liquidity foregone. B) the higher interest rates that can be earned by holding a bond fund. C) the decrease in risk from holding money rather than a bond fund. D) the liquidity gained by holding ready cash.
Country A can produce 50 units of beer or 80 units of pizzas. Country B can produce 100 units of beer or 100 units of pizzas. Which of the following statements is true?
A. Country B has an absolute advantage in both products. B. Country A has a comparative advantage in pizza and country B has a comparative advantage in beer. C. Country B has a comparative advantage in pizza and country A has a comparative advantage in beer. D. A and B.