An increase in the demand for peanuts due to changes in consumer tastes, accompanied by an increase in the supply of peanuts as a result of favorable growing conditions, will result in
A) an increase in the equilibrium quantity of peanuts and no change in the equilibrium price.
B) an increase in the equilibrium price of peanuts and no change in the equilibrium quantity.
C) an increase in the equilibrium price of peanuts; the equilibrium quantity may increase or decrease.
D) an increase in the equilibrium quantity of peanuts; the equilibrium price may increase or decrease.
Answer: D
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Advocates of flexible exchange rates claim that under flexible exchange rates, a currency
A) appreciation caused by increasing the money supply would reduce unemployment by lowering the relative price of domestic products. B) depreciation caused by increasing the money supply would increase unemployment by lowering the relative price of domestic products. C) depreciation caused by increasing the money supply would reduce unemployment by lowering the relative price of domestic products. D) depreciation caused by increasing the money supply would reduce unemployment by increasing the relative price of domestic products. E) depreciation cause by decreasing the money supply would not effect unemployment, but would increase the relative price of domestic products.
The "lemons" problem is used to explain the concept of:
A. complete information. B. adverse selection. C. moral hazard. D. produce markets.
Government spending conducted for the purpose of achieving full employment or price stability is an example of
A. exchange-rate policy. B. interest-rate policy. C. fiscal policy. D. monetary policy.
An extreme case in which a percentage change in price, no matter how large, results in zero change in quantity is called:
a. perfect inelasticity. b. perfect elasticity. c. strong elasticity. d. weak elasticity.