If the State of California decides to raise the drinking age to 25, what would happen to the demand for beer?
A. The demand for beer will shift left.
B. The demand for beer will stay the same, but people will move up the demand curve consuming less.
C. The demand for beer will shift right.
D. One cannot tell what will happen with the information given.
Answer: A
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Standard graphical analysis shows that monopoly creates a deadweight loss.
(i) How and why must this welfare analysis be modified when the firm is a natural monopoly? (ii) How and why must this welfare analysis be modified when the firm's market power is acquired from a legal barrier to entry?
Refer to Figure 5-4. What does S1 represent?
A) the market supply curve that reflects private cost B) the market supply curve that reflects only private benefit C) the market supply curve that reflects only external cost D) the market supply curve that reflects social cost
In the long run, a perfectly competitive market produces at ________, whereas the monopolistic competitive firm does not
A) the output at which the lowest average total cost of production is reached B) an output level at which positive economic profits exist C) zero economic profits D) the point at which MR = MC=ATC
The time it takes for a new policy to register its full impact on the economy after it has been put in force is known as the_____
a. activity lag b. decision-making lag c. effectiveness lag d. implementation lag e. recognition lag