Land in the South can often be used to grow either tobacco or cotton. Suppose the price of tobacco increases. Explain how the market for cotton will be affected
What will be an ideal response?
Because of the higher price of tobacco, farmers will reduce the amount of cotton grown and grow more tobacco. Thus, the supply of cotton will fall. This will raise the equilibrium price of cotton and reduce the equilibrium quantity sold.
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In a prisoner's dilemma game, the Nash equilibrium is better for each player than is the cooperative solution
Indicate whether the statement is true or false
Which of the following macroeconomic variables is not in the equation of exchange?
a. Real GDP. b. Real exchange rate. c. Velocity of money. d. Money supply. e. All of the above are part of the equation of exchange.
The total demand for a public good is found by
A) horizontally summing all individual demands. B) vertically summing all individual demands. C) finding the demand from the median voter. D) dividing the marginal cost of the good by the number of voters.
If Y = A × N × (75 + K/N), where K = 1000, N = 20, and A = 10, what happens if K doubles and N doubles?
A. Y quadruples. B. Y doubles. C. Y is unchanged. D. Y increases by 50%.