A major grocery store chain switches from bagging groceries in paper sacks to bagging them in plastic bags. As a result, the grocery chain demands more plastic bags than are available at the current market price. As a result:
a. the market price for paper sacks is likely to increase
b. the market price for plastic bags is likely to increase.
c. the quantity of paper sacks purchased by the chain is likely to increase.
d. none of the above
b
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The demand for the Franconian franc in the foreign exchange market equals 14,000 - 3,000e and the supply of francs in the foreign exchange market equals 2,000 + 2,000e, where e is the nominal exchange rate expressed in U.S. dollars per franc. If the franc is fixed at 2 U.S. dollars per franc, then to maintain this fixed rate Franconia's international reserves must:
A. increase by 4,000 francs per period B. decrease by 4,000 francs per period C. increase by 2,000 francs per period D. decrease by 2,000 francs per period
The stimulation of a large economy aimed at increasing growth in the rest of the world is commonly known as
A) pass-through effect. B) locomotive effect C) investment effect. D) domino effect.
Everything else held constant, when prices in the art market become more uncertain
A) the demand curve for bonds shifts to the left and the interest rate rises. B) the demand curve for bonds shifts to the left and the interest rate falls. C) the demand curve for bonds shifts to the right and the interest rate falls. D) the supply curve for bonds shifts to the right and the interest rate falls.
If real GDP increased by 2% and nominal GDP increased by 1%, then output:
a. increased and the price level increased. b. increased and the price level decreased. c. decreased and the price level increased. d. decreased and the price level decreased.