Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D2 and S2 (point E). Which of the following changes would cause the equilibrium to change to point A?
A) a positive change in the technology used to produce apples and decrease in the price of oranges, a substitute for apples
B) an increase in the wages of apple workers and a decrease in the price of oranges, a substitute for apples
C) an increase in the number of apple producers and a decrease in the number of apple trees as a result of disease
D) a decrease in the wages of apple workers and an increase in the price of oranges, a substitute for apples
D
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On Naomi’s pig farm, Naomi hires all the labor used, grows all the grain fed to the pigs, and owns the barn. The costs used to calculate the total cost curve include
A. only the cost of labor. B. only the cost of labor and the cost of grain, which is completely consumed in the period in which it is grown. C. only the variable cost of growing grain. D. the cost of labor, the cost of growing grain, and the opportunity cost of the barn.
The idea that individuals can reach an efficient equilibrium through private trades, even in the presence of an externality, is called:
A. market failure. B. trade quotas. C. the Coase theorem. D. the invisible hand.
A tariff on a good increases the domestic price of the good, increases domestic production of the good, reduces the amount of the good sold, and decreases imports of the good
a. True b. False Indicate whether the statement is true or false
Read the following two sentences: A: Ten seconds after Nella waved her hand, her friend responded by saying hello. B: As Nella waved her hand, a gust of wind blew. Which of the following is the correct comparison of A and B?
a. A shows correlation; B shows causation. b. A and B both show correlation c. A shows causation; B shows correlation. d. A and B both show causation.