Cole was discussing the market for cocoa beans with his friend John Schmidt
Cole said, "Ever since Venezuela announced that its cocoa harvest was its lowest ever in fifteen years, the price of cocoa beans has been rising and rising and people are buying more and more. I think the demand for cocoa beans must be upward sloping." Is Cole right? Briefly explain why or why not.
Cole has confused a change in demand as s result of a change in the expected future price of cocoa beans with a change in price. Following the announcement of the poor harvest buyers expected that the price of cocoa beans would rise. In anticipation of higher prices in the future, demand increased; this led to a higher equilibrium price. As long as buyers believe that the price of cocoa beans will rise in the future they will increase their demand today.
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If the average income per U.S. worker decreases while that of Japanese workers remains unchanged, then the demand curve for Japanese yen will shift __________, which will cause the equilibrium exchange rate of the dollar price per yen to __________, which is the same thing as saying that the dollar will __________
A) rightward; rise; appreciate B) leftward; fall; appreciate C) rightward; rise; depreciate D) leftward; fall; depreciate E) rightward; fall; depreciate
The definition of gross domestic product is
A. the total value of all sales in the economy. B. the total value of production in the domestic economy plus the production of domestic firms in foreign countries. C. the total value of all sales of final and intermediate goods in the domestic economy. D. the total of the money values of all final goods and services produced in the domestic economy within a specific time period.
Which of the following examples would most likely happen with monopolistic competition?
a. When an ice cream shop introduces coffee ice cream, a nearby ice cream shop remains unaware of this. b. When a bowling alley offers $1,000 for a perfect game, another bowling alley offers $2,000 for a perfect game. c. When a coffee shop introduces pumpkin lattes, another coffee shop introduces cranberry lattes. d. When a restaurant offers free coffee refills, a nearby restaurant does the same.
Choose the letter below that best represents the type of shift that would occur in the following situation in the United States: Between 1930 and 1935, millions of U.S. farm families lost their farms, and less output was produced by the remaining farms. (See Figure 8.6.)
A. A. B. B. C. C. D. D.