A convenience store pays a farmer $1.25 per pineapple. If it costs the farmer $0.15 in seeds, $0.25 in fertilizer, and $0.25 in forgone output to grow each pineapple, the value added by the farmer to each pineapple is
A. $0.40.
B. $1.25.
C. $0.60.
D. $0.85.
Answer: D
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If two goods are substitutes, then a(n)
a. increase in the demand for one of them will cause its price to fall b. increase the supply of one of them will cause its price to rise c. increase in the price of one of them will cause the demand for the other to increase d. increase in the price of one of them will cause the supply of the other to increase e. decrease in the price of one of them will cause the demand for the other to increase
Which of the following policies would a Keynesian expect to produce the largest decrease in income?
A. A reduction in government spending of $100 billion B. A decrease in transfer payments of $100 billion C. An increase in government spending of $100 billion D. A tax increase of $100 billion
The distribution of surplus received from a subsidy offered in a market where a positive externality is present depends on:
A. if those who are affected receive their true value of the externality. B. where the government gets the money to pay for the subsidy. C. how the subsidy is distributed among those affected by the externality. D. None of these statements is true.
On the basic supply-demand graph, the point at which the demand curve and the supply curve intersect is located at
A. market price and market quantity. B. equilibrium price and equilibrium quantity. C. equilibrium demand and equilibrium supply. D. quantity demanded and quantity supplied.