Suppose you observe an increase in the equilibrium price of coffee and a decrease in the equilibrium quantity of coffee. Of the options listed below, this is most consistent with:
A. an increase in the cost of producing coffee.
B. a decrease in consumer income assuming coffee is a normal good.
C. an increase in consumer income assuming coffee is a normal good.
D. a decrease in the cost of producing coffee.
Answer: A
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Union membership has been falling since the year ________.
Fill in the blank(s) with the appropriate word(s).
Price floors are introduced to:
(a) Help suppliers as they know that the maximum price they will receive for their output is above equilibrium. (b) Help suppliers as they know that the minimum price they will receive for their output is above equilibrium. (c) Help consumers to ensure that they are not exploited by producers and allow them to purchase at a price lower than equilibrium. (d) Prevent inflation within the market.