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. As a result of the flooding during the winter, you would expect that
A. the price of lettuce would increase and both the quantity of lettuce supplied and the quantity of lettuce demanded would increase.
B. the price of lettuce would increase, the supply of lettuce would increase, and the quantity demanded of lettuce would decrease.
C. the supply of lettuce would decrease, the price of lettuce would increase, and the demand for lettuce would decrease.
D. the supply of lettuce would decrease, the price of lettuce would increase, and the quantity demanded of lettuce would decrease.
Answer: D
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When the price of a burrito increases from $2 to $4, the quantity demanded decreases from 50 to 40. Using the midpoint method, the price elasticity of demand equals
A) 1/3. B) 3. C) 2. D) 1. E) 1/2.
Monetarists argued that the Fed wasn't serious about adhering to a money-growth target because
A) it was unable to reduce inflation at all. B) it tried to target three different monetary aggregates simultaneously. C) the sacrifice ratio remained too high. D) it gave too much weight to movements in exchange rates.
Social welfare is
a. a government program through which society takes care of low-income people b. the overall well-being of people in the economy c. measured by spending on party supplies, restaurant meals, and movie tickets d. applies to sociology, not economics e. All the answers are correct.
When a positive externality is present
A) the market price is too low. B) the market price is too high. C) the market price is in equilibrium. D) none of these choices.