New safety regulations raise the cost of producing peanut butter just as an almond butter
craze sweeps the nation. What will happen to equilibrium price and quantity of peanut
butter?
a. Equilibrium price and quantity will increase.
b. Equilibrium price will increase but the effect on equilibrium quantity is uncertain.
c. Equilibrium quantity will decrease but the effect on equilibrium price is uncertain
d. Equilibrium price will decrease but the effect on equilibrium quantity is uncertain.
e. Equilibrium quantity will increase but the effect on equilibrium price is uncertain.
c. Equilibrium quantity will decrease but the effect on equilibrium price is uncertain
,American incomes rise (assume peanut butter is a normal good) while the price of bread (a
complement) falls. What will happen to equilibrium price and quantity of peanut butter?
a. Equilibrium price and quantity will increase.
b. Equilibrium price will increase but the effect on equilibrium quantity is uncertain.
c. Equilibrium quantity will decrease but the effect on equilibrium price is uncertain.
d. Equilibrium price will decrease but the effect on equilibrium quantity is uncertain.
e. Equilibrium quantity will increase but the effect on equilibrium price is uncertain.
a. Equilibrium price and quantity will increase.
Elections are underway, and Congressman Bob has promised that if he is elected, college
will be tuition-free for everybody. Assuming nothing else changes, if put into effect, this
policy would
a. increase the demand for college education.
b. increase the number of people attending college.
c. Both a and b.
d. Neither a nor b.
b. increase the number of people attending college.
,Congressman Bob claims that because his plan will be paid for by a special tax on
billionaires, it will cost the rest of us (the non-billionaires) nothing. What would an economist
say?
a. If billionaires kept the money, they might do something productive with it (being
productive was probably how they became billionaires in the first place).
b. The money from the tax on billionaires could be used to fund something else.
c. Both a and b.
d. Neither a nor b.; the congressman is correct.
c. Both a and b.
, Congressman Bob claims that because his plan will be paid for by a special tax on
billionaires, it will cost the rest of us (the non-billionaires) nothing. Congressman Bob's plan
will be least expensive if
a. the demand for college is elastic.
b. the demand for college is inelastic.
c. the demand for college is less than the supply.
d. college education is an inferior good.
b. the demand for college is inelastic.
craze sweeps the nation. What will happen to equilibrium price and quantity of peanut
butter?
a. Equilibrium price and quantity will increase.
b. Equilibrium price will increase but the effect on equilibrium quantity is uncertain.
c. Equilibrium quantity will decrease but the effect on equilibrium price is uncertain
d. Equilibrium price will decrease but the effect on equilibrium quantity is uncertain.
e. Equilibrium quantity will increase but the effect on equilibrium price is uncertain.
c. Equilibrium quantity will decrease but the effect on equilibrium price is uncertain
,American incomes rise (assume peanut butter is a normal good) while the price of bread (a
complement) falls. What will happen to equilibrium price and quantity of peanut butter?
a. Equilibrium price and quantity will increase.
b. Equilibrium price will increase but the effect on equilibrium quantity is uncertain.
c. Equilibrium quantity will decrease but the effect on equilibrium price is uncertain.
d. Equilibrium price will decrease but the effect on equilibrium quantity is uncertain.
e. Equilibrium quantity will increase but the effect on equilibrium price is uncertain.
a. Equilibrium price and quantity will increase.
Elections are underway, and Congressman Bob has promised that if he is elected, college
will be tuition-free for everybody. Assuming nothing else changes, if put into effect, this
policy would
a. increase the demand for college education.
b. increase the number of people attending college.
c. Both a and b.
d. Neither a nor b.
b. increase the number of people attending college.
,Congressman Bob claims that because his plan will be paid for by a special tax on
billionaires, it will cost the rest of us (the non-billionaires) nothing. What would an economist
say?
a. If billionaires kept the money, they might do something productive with it (being
productive was probably how they became billionaires in the first place).
b. The money from the tax on billionaires could be used to fund something else.
c. Both a and b.
d. Neither a nor b.; the congressman is correct.
c. Both a and b.
, Congressman Bob claims that because his plan will be paid for by a special tax on
billionaires, it will cost the rest of us (the non-billionaires) nothing. Congressman Bob's plan
will be least expensive if
a. the demand for college is elastic.
b. the demand for college is inelastic.
c. the demand for college is less than the supply.
d. college education is an inferior good.
b. the demand for college is inelastic.
