Suppose there are a series of forest fires that affect the lumber industry while, at the same time, consumers demand more wooden furniture. The wooden furniture market would experience
A. A decrease in price and an indeterminate change in quantity.
B. An increase in quantity and an indeterminate change in price.
C. An increase in price and an indeterminate change in quantity.
D. An increase in price and an increase in quantity.
Answer: C
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A point inside the production possibilities curve represents a combination of goods that is
a. inefficient. b. efficient. c. unattainable. d. attainable.
Which of the following statements applies to economics, as well as to other sciences such as physics?
a. Experiments are considered valid only when they are conducted in a laboratory. b. Good theories do not need to be tested. c. Real-world observations often lead to theories. d. Economics, as well as other sciences, is concerned primarily with abstract concepts.