Suppose that the market for coffee is in equilibrium at a price of $9.50 per pound and a monthly quantity of 20 million pounds. News of a drought in Brazil arrives so that people know that the supply of coffee months from now will be sharply reduced
What, if anything, will happen in the coffee market now? Explain.
What will be an ideal response?
The expectations of reduced supplies and higher prices in the future will cause current demand to increase and the market clearing price to rise.
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A decrease in the supply of labor will ________ real wages and ________ employment
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
Answer the following statements true (T) or false (F)
1) In a successive monopoly structure, if distributor has a constant marginal cost, the wholesale demand curve will lie below the retail marginal revenue curve. 2) Vertical integration is not an economically sound decision in a successive monopoly situation. 3) Vertical integration of a monopoly and a perfectly competitive firm does not yield greater economic profit. 4) If double marginalization exists between an upstream firm and a downstream firm, the vertical integration of the two firms will generate more economic profit. 5) The wholesale demand for a monopoly retailer depends of the retailer's marginal revenue.
Suppose the real gross domestic product (GDP) equals $100 billion this year and the nominal gross domestic product (GDP) is $200 billion. This implies that the price level has increased by _____
a. $200 billion b. 50 percent c. $100 billion d. 100 percent e. 200 percent
A firm is currently producing 100 units of output per day. The manager reports to the owner that producing the 100th unit costs the firm $5 . The firm can sell the 100th unit for $5 . The firm should continue to produce 100 units in order to maximize its profits (or minimize its losses)
a. True b. False Indicate whether the statement is true or false