Researchers demonstrate conclusively that drinking 4-6 ounces of ginger ale each day increases life expectancy by 3 years. What happens in the market for ginger ale?
A) The equilibrium price falls, and the equilibrium quantity rises.
B) The equilibrium price rises, and the equilibrium quantity falls.
C) The equilibrium price and quantity rise.
D) The equilibrium price and quantity fall.
Ans: C) The equilibrium price and quantity rise.
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Higher unemployment insurance benefits tend to increase unemployment because they
a. reduce the opportunity cost of job search and, hence, increase the search time. b. increase the opportunity cost of job search and, hence, increase the search time. c. reduce the opportunity cost of job search and, hence, decrease the search time. d. increase the opportunity cost of job search and, hence, decrease the search time.
If the dollar-yen exchange rate changes from $1 = 125 yen to $1 = 100 yen, then
a. exports to Japan will likely decrease. b. Japanese tourists will be more likely to visit the United States. c. U.S. businesses will be more likely to use Japanese shipping lines to transport their products. d. U.S. consumers will be more likely to buy Japanese-made automobiles.