Suppose new research shows that soy milk and other products derived from soybeans provide more health benefits than previously thought. At the same time, drought conditions result in extensive damage to the soybean crop
What will be the combined impact of these two factors on the equilibrium price and quantity of soybeans? A) Price will decrease, but the effect on quantity is indeterminate.
B) Price will increase, but the effect on quantity is indeterminate.
C) Quantity will decrease, but the effect on price is indeterminate.
D) Quantity will increase, but the effect on price is indeterminate.
B
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Shoe leather costs are
A) the costs in time and effort incurred by people and firms who are trying to minimize their holdings of cash because of inflation. B) the costs of changing prices, such as printing and mailing catalogues. C) the costs of the redistribution of wealth between lenders and borrowers. D) the costs associated with the confusion of prices as signals.
Define and distinguish between real and nominal GDP. Explain why the distinction is important to economists.
What will be an ideal response?
When forming theories, economists must be careful to
A. omit crucial factors. B. limit the analysis to two variables. C. mirror the real world as realistically but as simply as possible. D. consider historical behavior and policies. E. include all known facts and details.
Why is it that all of our wants cannot be satisfied?
A) because of shortages B) because we cannot seem to decide what we really want C) because other people try to change your mind about what you want D) because limited resources mean all the goods we want cannot be obtained