If the tea harvest is bad in a particular year, what will happen in the market for coffee?
a. increased price and decreased quantity
b. increased price and increased quantity
c. decreased price and increased quantity
d. decreased price and decreased quantity
e. no change in equilibrium price and quantity
B
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Why do oligopolists use product development and advertising?
A. They contribute to productive and allocative efficiency in markets. B. They enhance the public good by providing information and new products. C. They create conditions for mutual interdependence and support. D. They are less easily duplicated than price cuts as a competitive strategy.
Consider Figure 8.9. If David's payoff in the bottom rectangle were 40 instead of 70, the outcome of the game would be that:
A. both choose a high price. B. both choose a low price. C. Becky chooses a high price and David chooses a low price. D. David chooses a high price and Becky chooses a low price.
The primary objective of economics is
A. to study how people make choices with limited resources. B. to study why some people are never happy with the resources they have. C. to learn how to create more resources. D. to learn how to make the most profits with a given amount of resources.
The most important factor determining how quickly expected inflation adjusts when the government attempts to reduce inflation is
A. the slope of the IS curve. B. the degree of gradualism in the government's disinflationary policy. C. the credibility of the government's disinflationary policy. D. the slope of the Phillips curve.