The Surgeon General announces that eating apples promotes healthy teeth. As a result, the equilibrium price of apples
a. increases, and producer surplus increases.
b. increases, and producer surplus decreases.
c. decreases, and producer surplus increases.
d. decreases, and producer surplus decreases.
a
You might also like to view...
To increase income by $120 when the slope of the curve showing the relationship between your income and work hours is 8, how many extra hours will you need to work?
A) 8 B) 15 C) 112 D) 960
Economists believe that people respond in a predictable way to changes in costs and benefits. The term that best describes this phenomenon is
a. opportunity cost b. scarcity c. innovation d. marginal analysis e. other things equal (or ceteris paribus)
What is the quantity of coffee supplied and the quantity of coffee demanded at the equilibrium price?
a. 3,000 pounds supplied; 3,000 pounds demanded
b. 5,000 pounds supplied; 5,000 pounds demanded
c. 5,000 pounds supplied; 7,000 pounds demanded
d. 3,000 pounds supplied; 7,000 pounds demanded
Which of the following statements is true?
A. Firms are unlikely to relocate their high-pollution production to countries with lax environmental laws because they fear that such moves will result in adverse effects on their reputations. B. Evidence shows that measures to keep the environment clean represent a large percentage of the total costs of production for a firm in a country with strict environmental laws. C. There are large incentives for firms to relocate from countries with strict environmental laws to countries with lax environmental regulation. D. Imposition of a tax on the production of a particular high-pollution product typically has a greater impact on consumer surplus than on producer surplus.