Which of the following shifts the supply curve for oranges?
A) disastrous weather that destroys about half of this year's orange crop
B) a newly discovered increase in the nutritional value of oranges
C) an increase in the price of bananas, a substitute in consumption for oranges
D) an increase in income for all orange consumers
A
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A positive externality exists when
A. a person's or group's actions cause a benefit that is felt by others. B. a person's or group's actions cause a cost that is felt by others. C. market output is less than socially optimal output. D. a and c E. b and c
A paint firm has just announced that it will be building a new plant in a small town that is currently experiencing a high level of unemployment. The new plant will create 500 new jobs in the area and will occupy unused land at the edge of town
The plant will also dump some harmful chemicals into the town's river. From an economic standpoint this dumping of chemicals A) is unimportant since the firm is reducing the unemployment in the region. B) creates a negative externality. C) is the production of a public good. D) creates a positive externality.
All other factors held constant, when McDonald's raises the price of its Quarter Pounder by 50 cents,
A) there is likely to be a decrease in the quantity of Taco Bell's Chalupas demanded, assuming the Quarter Pounder and Chalupas are substitutes. B) there is likely to be an increase in demand for Taco Bell's Chalupas, assuming the Quarter Pounder and Chalupas are substitutes. C) there is likely to be a decrease in demand for Taco Bell's Chalupas, assuming the Quarter Pounder and Chalupas are substitutes. D) there is likely to be an increase in demand for McDonald's Quarter Pounder, assuming the Quarter Pounder and Chalupas are substitutes.
Which of the following would be most likely to cause a reduction in current aggregate demand in the United States?
a. increased fear of a recession b. an increase in the expected rate of inflation c. a sharp increase in the value of stocks owned by Americans d. a rapid increase in the growth of income in Canada, Mexico, and Western Europe