A technological improvement lowers the cost of producing coffee. At the same time, consumers' preferences for coffee increase. The equilibrium price of coffee will
A) rise.
B) fall.
C) remain the same.
D) rise, fall, or stay the same, depending on the relative size of the shifts in the demand and supply curves.
D
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Consider two scenarios for a nation's economic growth. Scenario A has real GDP growing at an average annual rate of 2%; scenario B has an average annual growth of 4%. The nation's real GDP would double in about
A. 36 years under scenario A, versus 18 years under scenario B. B. 36 years under scenario A, versus 9 years under scenario B. C. 18 years under scenario A, versus 9 years under scenario B. D. 25 years under scenario A, versus 12.5 years under scenario B.
The figure above shows a natural monopoly that the government must regulate. Which of the following pairs most likely results in similar outcomes?
A) marginal cost pricing and rate of return regulation B) marginal cost pricing and a two-part tariff C) average cost pricing and rate of return regulation D) predatory pricing and price caps E) marginal cost pricing and price cap regulation
A corporation seeking to expand and looking for the least risky financing option would choose
A. stocks. B. bonds. C. retained earnings. D. a bank loan.
Compared to the short-run price elasticity of demand, the long-run price elasticity of demand is
A) smaller. B) the same. C) greater. D) either greater than or less, depending on the number of substitutes the good has.