Between recalls on mass-produced commercial dog food and a general understanding of the benefits of a healthier diet for pets, the demand for natural or organic dog food is experiencing a significant increase. Wanda’s treats are more expensive than the “mass-produced” treats found in most grocery and big-box stores but she prides herself on providing high-quality products and believes that her customers are willing to pay the extra money for quality.
How does Wanda’s strategy of being a high-quality provider take advantage of the shifts in consumer demand for healthy dog treats?
Answer: This leads to increase in demand, shifting demand curve for Wanda's products to right leading to increase in its price.
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For the past 40 years the Federal Reserve has expressed policy in terms of a target value for:
A. open market operations. B. bank reserves. C. the Federal Reserve discount rate. D. the federal funds rate.
All of the following involve a moral hazard problem EXCEPT
A) an individual driving carelessly after buying a comprehensive insurance policy for a Ford Pinto. B) the IMF bailing Mexico out of a financial crisis, with promises to do the same for other nations that might face financial problems. C) making regular visits to your doctor because you know that you have full healthcare coverage. D) the requirement of banking institutions that owners invest a substantial portion of their own capital in their bank. E) membership in FDIC (Federal Deposit Insurance Corporation) by your local bank.
When positive externalities are present in a market, it means that:
A. private benefits are less than social benefits. B. private benefits are less than external benefits. C. social benefits are less than external benefits. D. external benefits are equal to social benefits.
In the United States, the unemployment rate for blacks is roughly the same as the unemployment rate for whites
a. True b. False Indicate whether the statement is true or false