Refer to the accompanying figure. Suppose the solid line shows the current demand for coffee. In response to a news story explaining that coffee causes heart disease, you should expect:
A. neither a change in quantity demanded nor a shift in demand.
B. the demand curve to shift to D(B) in anticipation of higher future prices.
C. the demand curve to shift to D(A) because some people will stop drinking coffee.
D. the quantity of coffee demanded to decrease, but no shift in the demand curve.
Answer: C
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An in-kind transfer payment is:
A. made out of kindness. B. less costly to provide than a cash payment. C. a benefit in the form of a good or service. D. a cash payment.
Which of the following scenarios best demonstrates Say's law?
A. Nandini plays the piano at a restaurant, and her income is based solely on voluntary donations. She never lets her demand for goods and services determine how long she plays the piano. B. Professor Mackowski teaches economics at a university and receives a monthly paycheck. Each month he spends half his paycheck and saves the rest in his piggy bank under his bed. C. Farmer Perk grows strawberries on his farm. As he grows them, he decides to buy more goods if he sells more strawberries than he expected.
If Joe withdraws a $100 bill from his checking account and Jack deposits another $100 bill in his savings account, by how will M1 and M2 change?
A) M1 will decrease, but M2 will remain the same. B) M1 will increase, and M2 will increase. C) M2 will decrease by $100. D) Both M1 and M2 will remain the same. E) M1 will remain the same, and M2 will increase.
Which of the following formulas defines average cost?
a. AC = TC/Q b. AC = MRP = MFC c. AC = MPP/Q d. AC = TC ? Q