Refer to Scenario 3.2 below to answer the question(s) that follow.SCENARIO 3.2: Lettuce and spinach are substitutes. Lettuce and tomatoes are complements. Lettuce is a normal good. During the winter, about 20% of the lettuce crop was destroyed by flooding.Refer to Scenario 3.2. The floods that destroyed part of the lettuce crop would have caused the equilibrium price of spinach to ________ and the equilibrium quantity of spinach to ________.
A. increase; decrease
B. decrease; decrease
C. decrease; increase
D. increase; increase
Answer: D
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Inferior goods are those for which demand increases as
A) the price of a substitute falls. B) the price of a substitute rises. C) income decreases. D) income increases.
Regardless of market structure, all firms
A) consider the actions of rivals. B) maximize profit by setting marginal revenue equal to marginal cost. C) produce a differentiated product. D) have the ability to set price.
All of the following are true, except
a. Bubbles are prices that cannot be explained by normal economic forces b. Many economists don't think bubbles exist c. Many economists have a clear idea about how to model bubbles d. All of the above are true
The difference between the number of workers employed if the economy was operating at full employment and the number of workers currently employed given aggregate expenditures is known as
a. cyclical unemployment b. frictional unemployment c. structural unemployment d. unemployment is not possible in the short run macro model e. urban unemployment