Studies have shown that drinking one glass of red wine per day may help prevent heart disease. Assume this is true, and a fungal disease destroys a large portion of the grape harvest of California vineyards. In the market for red wine, these two
developments would
A) increase demand and increase supply, resulting in an increase in the equilibrium quantity and a decrease in the equilibrium price of red wine.
B) increase demand and decrease supply resulting in a decrease in both the equilibrium quantity and the equilibrium price of red wine.
C) increase demand and decrease supply, resulting in an increase in the equilibrium price and an uncertain effect on the equilibrium quantity of red wine.
D) increase demand and decrease supply, resulting in an increase in both the equilibrium price and the equilibrium quantity of red wine.
Answer: C
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In the Keynesian model, the difference between using monetary and fiscal policy to eliminate a recession is that
A) monetary policy will eliminate a recession quicker than fiscal policy will. B) fiscal policy will eliminate a recession quicker than monetary policy will. C) an expansionary monetary policy will leave the economy with a lower real interest rate than an expansionary fiscal policy. D) an expansionary fiscal policy will leave the economy with a lower real interest rate than an expansionary monetary policy.
Under what conditions might the median voter's preferred outcome not be selected through majority rule?
What will be an ideal response?
What are the factors that can shift the supply of financial capital to a certain investment?
a. if people do not want to alter their existing levels of risk b. if the riskiness or return on one investment is the same as other investments c. if the riskiness or return on one investment changes relative to other investments d. if people do not want to alter their existing levels of consumption
Economists and policy makers are committed to encouraging a high and growing level of real GDP because:
A. This implies a lower price level B. This means a higher level of unemployment C. This implies an increase in investment D. This means greater consumption opportunities