Vineyards can grow either red wine grapes or white wine grapes on their land. Which of the following would cause the supply of red wine grapes to decrease?
A) an increase in the price of white wine grapes
B) a decrease in the price of white wine grapes
C) an increase in the demand for red wine grapes
D) an increase in the price of red wine
Answer: A
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Which of the following is an example of an undesirable side effect of the operation of the market mechanism?
a. negative externalities b. comparative advantages c. abstractions d. productivity growth
A major employer in a small town announces upcoming major layoffs of employees. What should we expect to happen to the consumption functions of the affected employees?
A. The consumption functions will shift upward. B. Most employees will move upward along their consumption functions C. The consumption functions will shift downward D. Most employees will move downward along their consumption functions