Which of the following will decrease the demand for coffee?
a. the discovery that caffeine can cause heart problems
b. an increase in the price of coffee
c. an increase in the price of tea, a substitute for coffee
d. a decrease in the prices of coffee makers and coffee cups, complements to coffee
A
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The law of diminishing returns results in:
A. an eventually falling marginal cost curve. B. a total product curve that eventually increases at a decreasing rate. C. an eventually rising marginal product curve. D. a total product curve that rises indefinitely.
The effect time lag is the time period that elapses
A. between when an economic problem manifests itself and it is officially acknowledged. B. between the recognition of an economic problem and implementing policies to solve it. C. between implementing policies to solve an economic problem and when the results of that policy can be measured. D. between the beginning of the budgetary process and the final budget resolution.
In Table 17.3, Brazil has 
A. an absolute advantage but not a comparative advantage in lumber. B. an absolute and comparative advantage in cars. C. an absolute and comparative advantage in lumber. D. an absolute and comparative advantage in both goods.
If a monopoly discovers that the demand for its output has become more elastic at the original output level, then it will respond by
A) producing more and setting a higher price. B) setting a lower price. C) setting a higher price. D) producing more while leaving price unchanged.