A decrease in the demand for soft drinks due to changes in consumer tastes, accompanied by an increase in the supply of soft drinks as a result of reductions in input prices, will result in
A) a decrease in the equilibrium quantity of soft drinks and no change in the equilibrium price.
B) a decrease in the equilibrium price of soft drinks and no change in the equilibrium quantity.
C) a decrease in the equilibrium price of soft drinks; the equilibrium quantity may increase or decrease.
D) an increase in the equilibrium quantity of soft drinks; the equilibrium price may increase or decrease.
Answer: C
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What happens to the demand for loanable funds curve when the economy enters a recession?
A) The demand for loanable funds curve shifts leftward because wealth decreases. B) The demand for loanable funds curve shifts leftward because expected profit falls. C) The demand for loanable funds curve shifts leftward because the real interest rate falls. D) The demand for loanable funds curve shifts rightward because the real interest rate falls. E) The demand for loanable funds curve shifts rightward because expected profit falls.
A positive externality exists and government wants to impose a subsidy in order to bring about an efficient outcome. To accomplish its objective, government must set the subsidy equal to marginal
A. private cost. B. social benefit. C. external cost. D. social cost. E. external benefit.
An economy of 80 million people has ten percent of them engaged in research and development, where their productivity is 0.0035
The economy is on a balanced growth path, when suddenly 2.88 million people move from goods production into R&D, raising the fraction there to 13.6 percent. In the one period that begins with this labor reallocation, the growth rate of output is ________. [Refer to the instruction above.] A) 2.8% B) 0.0% C) 3.8% D) 2.2%
Which of the following types of countries has experienced increasing inequality in recent decades?
A. Poor countries B. Rich countries C. Countries with low economic growth D. All of these have experienced increasing inequality.