Suppose the equilibrium price for soft drinks is $1.00. If the current price in the soft drink market is $1.25 each
A) there will be a surplus of soft drinks.
B) there will be a shortage of soft drinks.
C) the supply curve of soft drinks will shift leftward.
D) the demand curve for soft drinks will shift leftward.
A
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The Cobb-Douglas production function F(L,K) = AL?K? will exhibit decreasing returns to scale when:
A. ? + ? = 1. B. ? + ? < 1. C. ? + ? > 1. D. ? + ? = 0.
The government in Katrina’s country does little to enforce property rights. Which statement about this situation is most likely true?
a. The government is encouraging economic growth. b. People in Katrina’s country are saving most of their incomes. c. People in Katrina’s country are unwilling or unable to invest. d. The economy is growing too rapidly for the government to keep up.
Which of the following might be a method that the government could use to promote the production of a good that generates positive externalities?
A. financing additional production B. subsidies C. regulations D. All of these are correct.
Empirical evidence shows that in the short run, purchasing power parity ________, and in the long run, purchasing power parity ________.
A. holds; does not hold B. does not hold; holds C. holds; holds D. does not hold; does not hold