Which of the following would cause both the equilibrium price and equilibrium quantity of potatoes (assume that potatoes are an inferior good) to decrease?
A) a technological advancement that results in a bumper crop of potatoes
B) a freeze that sharply reduces potato output
C) a decrease in consumer income
D) an increase in consumer income
D
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When consumers decide that they do not want virtual pets anymore, and this drives all the virtual pet producers out of business, this is a reflection of
a. an outrage b. not related to issues of freedom c. consumer sovereignty d. an inefficient use of resources e. a circular flow model
The slope of the aggregate supply curve increases as output increases because
a. the cost of resource-use increases as potential is reached. b. consumers are willing to pay more as output expands. c. firms substitute capital for labor as prices increase. d. firms substitute capital for labor as capacity is reached.