Consider the market for peanut butter. If there is an increase in the price of bread (a complement for peanut butter) along with a drought in peanut growing areas, the
A) equilibrium quantity of bread increases.
B) equilibrium quantity of peanut butter definitely decreases.
C) equilibrium quantity of peanut butter might increase or might decrease.
D) equilibrium price of peanut butter definitely rises.
E) equilibrium price of peanut butter definitely falls.
B
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Suppose Carol's Candid Cameras wants to increase its total revenue. If the firm lowers the price of cameras by 2 percent, Carol must be predicting that the quantity
A) supplied will increase by more than 2 percent. B) demanded will increase by more than 2 percent. C) demanded will decrease by less than 2 percent. D) supply will decrease by less than 2 percent.
Food stamps _____
a. do little to increase demand for agricultural products b. make certain low-income individuals eat healthy foods c. increase demand for agricultural products d. help fight obesity
If purchasing power parity holds between the U.S. and China:
A. the real exchange rate must be 1. B. the nominal exchange rate must be 1. C. the U.S. must no longer have a trade deficit. D. China must no longer have a trade deficit.
Which of the following pholitical philosophies would support redistribution of income that makes society fully egalitarian?
a. Liberals, because they believe in the maximin criterion. b. Libertarians, because they believe in evaluating the process by which economic outcomes arise. c. Utilitarians, because they believe in diminishing marginal utility. d. None of the above would support completely egalitarian redistribution of income.