Pineapples and kumquats are substitute goods. Exceptional weather in Guatemala resulted in a bumper crop of pineapples. Ceteris paribus,
A. the price of both pineapples and kumquats will fall.
B. the price of kumquats will fall and the price of pineapples will increase.
C. the price of both pineapples and kumquats will increase.
D. the price of kumquats will increase and the price of pineapples will fall.
Answer: A
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In the figure above, if the market is at equilibrium, then the total consumer surplus equals the area ________ and the total producer surplus equals the area ________
A) A; B B) B; C C) C; B D) A; C E) A + B; C
In the figure above, if the interest rate is 6 percent
A) there is a $0.1 trillion excess quantity of money and the interest rate will rise. B) there is a $0.1 trillion excess quantity of money and the interest rate will fall. C) the money market is in equilibrium and the interest rate will remain constant. D) there is a $0.1 trillion excess demand for money and the interest rate will rise.
According to Elinor Ostrom's view of The Tragedy of the Commons:
a. The only way to prevent the collapse of the commons is government intervention. b. The only way to prevent the collapse of the commons is to privatize the commons so that it is owned by a single individual. c. Individuals will create institutions to prevent the collapse of the commons. d. Individuals will use the commons beyond the socially efficient point.
Which of the following will not shift the aggregate demand curve to the right?
a. Consumers becoming more optimistic about the future. b. An increase in government spending. c. Business optimism increases. d. Consumers become pessimistic about the future.