After the sugar substitute saccharin was found to cause cancer in laboratory mice, its price dropped dramatically. This change in the price was because
A) the supply of saccharin decreased.
B) the demand for saccharin decreased.
C) the government ordered the price reduction.
D) saccharin producers felt sorry for their past customers and were making an honest attempt to compensate them.
B
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Fiscal policy includes all of the following EXCEPT
A) policies that influence the rate of growth of the quantity of money in circulation. B) changing taxes. C) changing government spending. D) policies that influence aggregate demand.
In the circular flow model, the expenditures on goods and services flow in the
A) same direction as goods and services in all cases. B) same direction as goods and services only if they both flow through the goods market. C) same direction as goods and services only if they both flow through the factor market. D) opposite direction as goods and services. E) same direction as factor markets.
Refer to the above figure. The shape of the production possibility curve indicates that production of
A) wheat is characterized by increasing costs while the production of beans is characterized by decreasing costs. B) wheat is characterized by decreasing costs while the production of beans is characterized by increasing costs. C) both goods are characterized by increasing costs. D) both goods are characterized by decreasing costs.
In the above figure, total cost for this profit-maximizing monopolistically competitive firm is
A) $91,000. B) $50,000. C) $70,000. D) $72,000.