Which of the following would cause a decrease in the supply of peanut butter?
A) a decrease in the price of jelly (assuming that peanut butter and jelly are complements)
B) a decrease in the price of peanut butter
C) an increase the price of peanuts
D) an increase in the technology used to produce peanut butter
Answer: C
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Suppose a market begins in equilibrium. If supply increases, then at the original equilibrium price the quantity demanded is
A) is less than the quantity supplied and a surplus results. B) is less than the quantity supplied and a shortage results. C) exceeds the quantity supplied and a surplus results. D) exceeds the quantity supplied and a shortage results.
The construct of a representative firm is most helpful in describing the behavior of all of the firms in the economy when
A) there are constant returns to scale. B) there are increasing returns to scale. C) there are decreasing returns to scale. D) the marginal product of labor is increasing in the amount of labor input.
Suppose a U.S.-made machine costs $500 and the exchange rate is 100 yen = $1 . A Japanese firm purchasing this machine would pay
a. 100 yen b. 500 yen c. 5,000 yen d. 10,000 yen e. 50,000 yen
Workers often have ________ contracts and so their wages are ________.
A. long-term; flexible B. long-term; sticky C. short-term; sticky D. short-term; flexible