A hailstorm kills all of the wheat in Minnesota. What will happen to the price and quantity of wheat sold in the U.S.?
A. Equilibrium price falls, equilibrium quantity falls.
B. Equilibrium price rises, equilibrium quantity falls.
C. Equilibrium price rises, equilibrium quantity rises.
D. Equilibrium price falls, equilibrium quantity increases.
Answer: B
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A simplified representation of a complicated situation is:
A. cutting corners. B. a model. C. useless without adding fine details. D. econometrics.
Of the theories listed below, which do the best job of explaining why educated people are paid more than uneducated people?
a. human-capital and price-fixing b. human-capital and signaling c. wage-differential and signaling d. wage-differential and compensating-differentials
If goods A and B are considered complements, a decrease in the price of A would cause
A. the demand curve for B to shift to the right. B. a movement along the demand curve for B to a (higher price, lower quantity) point. C. the demand curve for B to shift to the left. D. a movement along the demand curve for B to a (lower price, higher quantity) point.
If marginal utility is declining but still positive, total utility is increasing.
Answer the following statement true (T) or false (F)