If good weather conditions result in a larger than normal crop of peaches, then the
A) equilibrium price of peaches rises, and the equilibrium quantity of peaches increases.
B) equilibrium price of peaches falls, and the equilibrium quantity of peaches increases.
C) demand curve for peaches shifts leftward.
D) increase in the supply of peaches induces a greater demand for peaches, so that the equilibrium price rises and the equilibrium quantity increases.
E) equilibrium price of peaches falls, and the equilibrium quantity of peaches decreases.
B
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Protection of rivers in Idaho is a public good. If the marginal social cost of protecting rivers in Idaho exceeds the marginal social benefit of river protection, is there more than, less than,
or the efficient amount of river protection taking place?
If the MPC is .75, then a $50 billion increase in investment would result in an increase in GDP of
A. $50 billion. B. $75 billion. C. $150 billion. D. $200 billion.
If the absolute price elasticity of demand is 0.2, a 5 percent decrease in the price will cause
A) the quantity demanded to increase by 1 percent. B) the quantity demanded to increase by 10 percent. C) the quantity demanded to increase by 0.25 percent. D) the quantity demanded to increase by 2.5 percent.
In the figure above, for each CD, the price a consumer is willing to pay is equal to the
A) economy's marginal social cost of producing that CD. B) consumer's own marginal benefit from consuming that CD. C) consumer's total consumer surplus. D) Both answers A and B are correct.