(Consider This) Suppose that salsa manufacturers sell 2 million bottles at $3.50 in one year and 3 million bottles at $3 in the next year. Based on this information, we can conclude that the:
A. law of supply has been violated.
B. law of demand has been violated.
C. demand for salsa has increased.
D. supply of salsa has increased.
Answer: D
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If the costs of production do not change as output increases in the long run in a perfectly competitive industry, then this is a
A) constant-return-to-scale industry. B) constant-competitive industry. C) constant-cost industry. D) constant-price industry.
Which of the following pricing strategies is NOT used in markets with special cost and demand structures?
A. Transfer pricing B. Cross-subsidization C. Peak-load pricing D. Low-price guarantees
Does economic growth have any negative side effects?
A. Yes, but only for the poorest segment of a nation's population B. No. Every person in a nation experiencing economic growth will benefit. C. No, because where negative side effects do occur, a nation's government is required to neutralize them D. Quite possibly. Some say economic growth puts people on a never-ending quest to satisfy newly created wants, so we always feel disappointed with our lives.
The use of fiscal policy to stabilize the economy is limited because
A) changes in government spending and tax rates have a small effect on aggregate demand. B) changes in government spending and tax rates have a small effect on interest rates. C) the legislative process can be slow, which means that it is difficult to make fiscal policy actions in a timely way. D) the Internal Revenue Service (IRS) resists changes in tax rates because of all the changes they would have to make to the tax code.