Suppose that the market price of sugar is 25 cents per pound and a farmer's marginal cost of producing sugar is 28 cents per pound. The farmer should increase her sugar production.
Answer the following statement true (T) or false (F)
False
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A ________ in the long-run real interest rate ________ household's demand for durable goods
A) fall; increases B) rise; increases C) rise; does not affect D) fall; lowers
An increase in demand for chocolate chips results in a(n)
a. higher equilibrium price and a lower equilibrium quantity b. lower equilibrium price and a lower equilibrium quantity c. lower equilibrium price and a higher equilibrium quantity d. higher equilibrium price and a higher equilibrium quantity e. increase in the supply of chocolate chips
The substitution effect isolates the change in the consumption of a good caused by:
A. the change in consumer preferences. B. the change in the market rate of substitution. C. the lower "real" income. D. None of the statements is correct.
GoodPrice Increase Last YearAmusement park tickets5.0%Bowling balls4.2%Camouflage neckties3.1% Refer to Table 8.1, which gives hypothetical data on price changes for three goods. If the overall rate of inflation in the economy was 3.5%, what happened to the real price of camouflage neckties?
A. The real price of camouflage neckties fell by 0.4%. B. The real price of camouflage neckties fell by 6.6%. C. The real price of camouflage neckties rose by 0.4%. D. The real price of camouflage neckties rose by 6.6%.