Suppose that in October the price of a cup of cafe latte was $2.50 and 400 lattes were consumed. In November the price of a latte was $2.00 and 600 lattes were consumed. What might have caused this change?
A. The price of tea (a substitute for cafe lattes) fell.
B. The price of tea (a substitute for cafe lattes) rose.
C. The price of coffee beans (an input of production of cafe lattes) rose.
D. The price of coffee beans (an input of production of cafe lattes) fell.
Answer: D
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Refer to Figure 28-2. Suppose the economy is at point A in the figure above. Which of the following is true?
A) Actual inflation is 1%. B) The economy will move from A to B. C) The expected rate of inflation is 5.5%. D) The current unemployment rate is 3.8%. E) The current unemployment rate is equal to the natural rate of unemployment.
Under deferred compensation packages,
A) a moral hazard occurs if a firms fires a good worker before the worker receives her deferred compensation. B) a moral hazard occurs if workers decide not to shirk so as to receive the deferred compensation. C) moral hazards are avoided. D) workers' wages are below their marginal revenue product as they near retirement.
Under which one of the following market structures are sellers most likely to consider the reaction of rival sellers when they set the price of their product?
A. Perfectly competition. B. Monopoly. C. Monopolistic competition. D. Oligopoly.
Even in democratic governments, we tend to have a problem with accountability due to the following reasons, except
What will be an ideal response?