Refer to Scenario 3.2 below to answer the question(s) that follow.SCENARIO 3.2: Lettuce and spinach are substitutes. Lettuce and tomatoes are complements. Lettuce is a normal good. During the winter, about 20% of the lettuce crop was destroyed by flooding.Refer to Scenario 3.2. If at the same time that part of the lettuce crop was destroyed, consumer income also decreased, then, ceteris paribus, in the market for lettuce this would have caused
A. the equilibrium price to decrease. The equilibrium quantity could have increased, decreased, or remained the same.
B. the equilibrium price to either increase, decrease, or remain the same and the equilibrium quantity to decrease.
C. both the equilibrium price and quantity to decrease.
D. the equilibrium price to increase and the equilibrium quantity to decrease.
Answer: B
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The government in the country of Zappoo is trying to decide which tax plan to implement. The table above shows three alternative plans. If the government decides to implement a progressive income tax, it will implement tax plan ________
A) A B) B C) C D) A or B
A monopolistic firm
A) will never sell a product whose demand is inelastic at the quantity sold. B) can sell as much as it wants for any price it determines in the market. C) cannot determine the price, which is determined by consumer demand. D) cannot sell additional quantity unless it raises the price on each unit. E) will always earn a profit in the long run.
Average cost regulation of a natural monopoly does not involve: a. production at a socially inefficient level of output
b. a tendency for average total cost curves to shift upward over time. c. a subsidy. d. production at the output level at which demand intersects the average total cost curve.
Tariffs are:
A. taxes on exports. B. subsidies for imports. C. taxes on imports. D. subsidies for exports.