Suppose the price of crude oil used to produce gasoline rises significantly. At the same time, consumers purchase hybrid cars in great numbers. In the market for gasoline, the market clearing price ________ and the equilibrium quantity ________
A) definitely falls, is indeterminate
B) is indeterminate, definitely falls
C) definitely falls, definitely rises
D) definitely rises, is indeterminate
Answer: B
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Suppose a Chinese restaurant provides free tea and fortune cookies to its customers. The restaurant is clearly
A) generating a negative externality. B) generating a positive externality. C) selling food below cost. D) attempting to increase its total profit. E) doing none of the above.
In 2015, health care's share of gross domestic product in the United States was about
A) 6.5 percent. B) 18 percent. C) 45 percent. D) 62.5 percent.
Suppose an individual experiences a permanent increase in income. As a result of this increased income, further assume that the individual eats dinner at restaurants more frequently each month
This information suggests that dinners at restaurants for this individual are A) an inferior good. B) a substitute good. C) a normal good. D) both complimentary and inferior.
The benefit of the production of capital is
a. decreased current production of consumption goods b. increased future production of consumption goods c. the amount of roundabout production d. abundant capital accumulation e. the decreased amount of future capital available