Ceteris paribus, which of the following will cause the supply of paper to decrease?
A.) The price of lumber, an ingredient in paper production, increases.
B.) The federal government decides to subsidize the production of paper.
C.) People rely more on electronic books and less on printed materials.
D.) The technology used to produce paper improves.
A.) The price of lumber, an ingredient in paper production, increases.
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Which of the following holds true in a circular flow diagram?
A) Income flow are represented by drawing an arrow from the household sector to firms. B) Factor flows are represented by drawing an arrow from the firm sector to the household sector. C) Production flows are represented by drawing an arrow from the firm sector to the household sector. D) Expenditure flows are represented by drawing an arrow from the firm sector to the household sector.
The effects of an increase in real money demand on an economy
A) is an argument against flexible exchange rates. B) is an argument in favor of flexible exchange rates. C) shows the difficulties in determining which exchange rate regime is better. D) is an argument in favor of flexible exchange rates only in the short run. E) is an argument against flexible exchange rates only in the short run.
If lower-income households spend a greater share of their income on cigarettes than do higher-income households, then a tax that raises the price of cigarettes will
A) cause lower-income households to incur a greater loss of consumer surplus than that incurred by higher-income households. B) cause higher-income households to incur a greater loss of consumer surplus than that incurred by lower-income households. C) raise consumer surplus among higher-income households. D) cause consumer surplus to decline among smokers, but the relative impact cannot be determined from the given information.
If the more-is-better principle holds, two different consumption bundles can't be equally attractive unless:
A. they contain the same amounts of each good. B. the consumer is unable to rank both bundles. C. as the consumer gives up some of one good, the consumer is given more of the other good. D. they each cost the same amount to purchase.