What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk, which is used to make lattés, and scientists discovered that lattés cause heart attacks?
a. Both the equilibrium price and quantity would increase.
b. Both the equilibrium price and quantity would decrease.
c. The equilibrium price would decrease, and the effect on equilibrium quantity would be ambiguous.
d. The equilibrium quantity would decrease, and the effect on equilibrium price would be ambiguous.
c
You might also like to view...
Compared to the other sources of spending, net exports is
A) large and negative. B) small and negative. C) large and positive. D) small and positive.
Which of the following is true about per capita income?
A) it is an approximate measure of how rich or poor a country is B) it is the same as income per worker only if everyone in the economy is assumed to work C) it is the product of TFP and capital per worker only if everyone in the economy is assumed to work D) all of the above E) none of the above
Augustus bought his BMW convertible as a new car in 1998 and knows that it is in excellent condition. He now wants to sell it and knows that there are many other similar cars on the used car market that are lemons. As a result:
A) he should be able to sell my car at a premium price because of its excellent condition. B) he will have to accept a lower price for his car because buyers might think that it is a lemon. C) he will not be able to sell his car unless he offers some sort of guarantee. D) he will get the best price for his car by selling it to a dealer.
The period between the implementation of a policy and its intended result is known as
A. the effect time lag. B. the action time lag. C. the data lag. D. the recognition time lag.