What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce steamed milk, which is used to make lattés, and scientists discovered that coffee prevents heart attacks?
a. Both the equilibrium price and quantity would increase.
b. Both the equilibrium price and quantity would decrease.
c. The equilibrium price would increase, and the effect on equilibrium quantity would be ambiguous.
d. The equilibrium quantity would increase, and the effect on equilibrium price would be ambiguous.
d
You might also like to view...
Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
Under a floating exchange-rate system, a country needs to pay more attention to the economic policies of the rest of the world
a. True b. False Indicate whether the statement is true or false
If people care about relative consumption rather than absolute consumption, then:
A. there is little need for government intervention in markets. B. their choices will lead to an efficient allocation of resources. C. their behavior will be consistent with traditional economic models. D. individuals' decisions need not lead to socially optimal outcomes.
Diminishing marginal utility implies that as an individual consumes more of a good, beyond some point another unit will add:
A. the same pleasure as the preceding unit. B. more pleasure than the preceding unit. C. more units of utility than the preceding units. D. less pleasure than the preceding unit.