Suppose a new study highlights the health benefits of eating bacon. At the same time, suppose the cost of producing bacon falls. Given these changes, you should expect to see:
A. an increase in both the equilibrium price and quantity of bacon.
B. an increase in the equilibrium price of bacon, but it's hard to say what will happen to the equilibrium quantity.
C. an increase in the equilibrium quantity of bacon, but it's hard to say what will happen to the equilibrium price.
D. a decrease in the equilibrium price of bacon, but it's hard to say what will happen to the equilibrium quantity.
Answer: C
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A contractionary monetary policy causes
A) higher interest rates, which increases the foreign demand for U.S. financial instruments, which causes interest rates to decrease. There is no effect on net exports. B) higher interest rates, which decreases the foreign demand for U.S. financial instruments, raising the international price of the dollar and increasing net exports. C) higher interest rates, which increases the international price of the dollar and decreases net exports. D) lower interest rates, which decreases the foreign demand for U.S. financial instruments, raising the international price of the dollar and increasing net exports.
One problem with traditional health insurance plans is _____
a. people have little choice over physicians b. it has eliminated employer-provided health care c. doctors have little incentive to economize d. patients spent too much time scrutinizing their bills
Changes in the price level will not shift the consumption function
a. true b. false
Maximum Feasible Hourly Production Rates (in Tons) of EitherWine or Beef Using All Available ResourcesProductArgentinaFranceWine (gallons)3060Beef (pounds)1030Use the above table. Assuming constant opportunity costs, if Argentina and France specialize based on comparative advantage, then they will trade if the rate of exchange
A. 0.25 gallons of wine for 1 pound of beef, and France imports beef. B. 0.4 pounds of beef for 1 gallon of wine, and France imports wine. C. 0.25 pounds of beef for 1 gallon of wine, and Argentina imports wine. D. is 7 gallons of wine for 1 pound of beef, and Argentina imports beef.