If bad weather destroyed half of the current coffee crop, ceteris paribus, it would:
a. increase the demand for coffee.
b. decrease the demand for coffee.
c. increase the demand for tea
d. decrease the demand for tea.
c
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The above figure shows the market for winter jackets. In an effort to keep the nation warm, the president places a price ceiling of $100 in the market for winter jackets. As a result, there is a
A) shortage equal to 150,000 jackets. B) surplus equal to 150,000 jackets. C) surplus equal to 300,000 jackets. D) shortage equal to 250,000 jackets. E) shortage equal to 100,000 jackets.
In the bank lending channel, an important reason for output increases in the short run after an expansionary monetary policy is that
A) the funds directly available for households and firms to spend will increase. B) prices will increase, making increased production more profitable for firms. C) the increase in government spending from an expansionary monetary policy increases output through the multiplier effect. D) the ability of banks to make loans will increase.
Patent laws promote technical progress in all of the following ways except one. Which is the exception?
a. They allow other firms to copy successful products as soon as they are marketed. b. They prevent duplication of inventions. c. They provide a stimulus to innovation. d. They provide the inventor with a temporary monopoly. e. They increase a firm's incentive to incur the up-front costs of developing new products.
Answer the following statement(s) true (T) or false (F)
1. Economics is the study of the choices we make among our many wants and desires given our limited resources. 2. The main economic problem is that surplus causes us to choose from so many competing options that it is difficult to make the correct choice. 3. Every society, whether it is capitalistic, socialistic, and totalitarian, faces economic problems. 4. Economists assume that most individuals act as if they are motivated by an interest in making money.