Assume the demand for coffee increases and the supply of coffee decreases. Which of the following outcomes is certain to occur?
A. The equilibrium quantity of coffee will fall.
B. The equilibrium price of coffee will fall.
C. The equilibrium price of coffee will rise.
D. The equilibrium quantity of coffee will rise.
Answer: C
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Use the following graph for a competitive market to answer the question below.
Assume the government imposes a $3 tax on buyers, which results in a shift of the demand curve from D1 to D2. The amount of the tax revenue paid by the buyer is
A. $300. B. $600. C. $2100. D. $900.
The phenomenon in which an insured individual takes less care in preventing the event against which she is insured is an example of
A) foolish behavior. B) adverse selection. C) moral hazard. D) double coincidence of wants.
To abstract from reality in an economic model means that:
a. we include only a few of the essential aspects of reality. b. the economic study surveys only a very limited period of time. c. we include only those elements which support our hypothesis. d. the model includes every aspect of the real world. e. the model examines the actions of the consumers in the absence of producers and the government.
Considering two countries X and Y, country X has a comparative advantage in the production of a good when it can produce the good at a lower opportunity cost than country Y
Indicate whether the statement is true or false