Which is the most likely effect upon the market for cotton of an increase in production costs due to higher oil prices?
A) A decrease in demand and hence a decrease in both the price of cotton and the quantity exchanged.
B) A decrease in supply and hence a decrease in both the price of cotton and the quantity exchanged.
C) A decrease in supply and hence an increase in the price of cotton and a decrease in the quantity exchanged.
D) A decrease in both supply and demand and hence a decrease in the quantity exchanged but no predictable change in the price of cotton.
C
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All of the following are benefits of labor unions EXCEPT
A) unions reduce wage inequity. B) unions increase the stability of the workforce. C) unions give workers a political voice. D) unions maximize employment for all workers.
Comparative advantage is based on opportunity costs
a. True b. False
Ceteris paribus, a decrease in the price of a good will cause the
a. quantity demanded of the good to decrease. b. quantity supplied of the good to increase. c. producer surplus derived from the good to decrease. d. supply of the good to decrease.
Which of the following products would most closely fit the competitive price-taker model?
a. stereo systems-there are many reputable brands. b. beer-it has many consumers. c. eggs-there are many producers of this relatively homogeneous product. d. automobiles-there are substantial economies of scale in production.