Demand for Snickers bars will decrease if:
A. the price of Milky Way bars (a substitute) decreases.
B. the price of Snickers bars decreases.
C. a news story claiming 95% of all geniuses eat at least one Snickers bar a day is released.
D. the price of Milky Way bars (a substitute) increases.
Answer: A
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Refer to the scenario above. If the marginal cost of producing the last unit of the good is $40, Nash equilibrium will occur when both firms charge a price of ________
A) $20 B) $40 C) $60 D) $70
In the figure above, the shift in the supply curve for U.S. dollars from S0 to S1 could occur when
A) the U.S. interest rate rises. B) foreign interest rates rise. C) the expected future exchange rate falls. D) the current exchange rate rises.
Assume the Congress approves increased drilling for oil in the U.S. to address the current energy shortage. People who are in favor of this policy argue that, ceteris paribus, this would cause:
A) an increase in the equilibrium price and quantity of oil. B) a decrease in the equilibrium price and quantity of oil. C) a decrease in equilibrium price and increase in the equilibrium quantity of oil. D) an increase in equilibrium price and a decrease in the equilibrium quantity of oil.
At a discount rate of 6 percent, what is the net present value of an investment project expected to yield $1,000 per year (to be received at year end) for the next three years?
a. $3,000 b. $2,829 c. $2,673 d. There is insufficient information to determine whether the project should be undertaken.