Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for coffee. What happens in this market if buyers expect the price of coffee to rise?
A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
C
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The world distribution of income has become more equal since 1970 because
A) the distribution of income within most countries has become more equal. B) foreign aid programs from rich nations have increased in size and especially in effectiveness. C) average incomes in poor nations, such as China, have risen faster than average incomes in rich nations, such as the United States. D) None of the above answers are correct.
If, in an economy, a $200 billion increase in consumption spending creates $200 billion of new income in the first round of the multiplier process and $150 billion in the second round, the multiplier and the marginal propensity to consume will be, respectively:
a. 4.00 and 0.75 b. 2.50 and 0.40 c. 3.33 and 0.70 d. 5.00 and 0.80
Governments that impose sin taxes on goods they believe are harmful to the consumer may not take into account deadweight loss because:
A. producer surplus increases when sin taxes are instituted. B. individuals are self-interest-seeking rational beings. C. the consumer surplus that is lost may not reflect the consumer's welfare. D. the demand curve reflects individuals' desire but not their ability to purchase.
Exhibit 5-2 Price and quantity demanded data Price Quantity Demanded 5 20 4 25 3 30 2 35 1 40 Using Exhibit 5-2, what is the price elasticity of demand when the price falls from five dollars to four?
A. 1. B. 1.25. C. 0.8. D. 2.0.