Suppose the market for coffee is in equilibrium at a price of $5 per pound. This means that:
A. any producer who sells coffee can earn a positive economic profit.
B. everyone can afford to buy coffee.
C. potential consumers not buying coffee value it at less than $5 per pound.
D. potential producers not producing coffee have reservation prices less than $5 per pound.
Answer: C
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If a 5 percent increase in income leads to a 10 percent decrease in quantity demanded for a product, this product is
A) a necessity. B) an income elastic good. C) an inferior good. D) a luxury good.
Many bars close to campuses have started offering cheaper beer to consumers with a student ID. These bars
a. Assume students have an inelastic demand curve b. Assume students have an elastic demand curve c. Are practicing price discrimination d. Both b and c
Warranties reduce information asymmetry.
Answer the following statement true (T) or false (F)
Which of the following will NOT shift the short-run aggregate supply (SRAS) curve?
A. a change in the consumer spending B. a change in the wage rate C. technological progress D. a reduction in energy prices