An increase in the quantity of tea demanded occurs if:
A. the income of tea drinkers increases.
B. the price of coffee rises.
C. the price of the tea falls.
D. the population of tea drinkers grows.
Answer: C
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
The figure above illustrates a small country's production possibilities frontier. Based on the figure, we can tell that the nation's resources are
A) not equally productive in all tasks because the production possibilities frontier is bowed out. B) unlimited because the slope is negative and the PPF is bowed out. C) equally productive in all tasks because the slope is negative. D) not equally productive in all tasks because the slope is negative. E) equally productive in all tasks because the production possibilities frontier is bowed out.
If an economy tried to use bananas as money, which function would bananas likely have the most difficult time fulfilling?
A) a store of value B) a unit of account C) a medium of exchange D) a means of payment
What do economists call the business practice of selling the same good at difference prices to different customers?
a. price discrimination b. collusion c. compensating differential d. Both a and b are correct