Suppose a frost destroys the tomato crop in California but farmers see an increase in their revenues. Which of the following best explains this?
A) Tomatoes are necessities.
B) The demand for tomatoes is price inelastic.
C) The decrease in supply led to huge price increases.
D) The cross-price elasticity between tomatoes and most other substitute vegetables is very low.
B
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Meat at the supermarket has contributed to increase in food prices in 2010, and high feed and fuel prices mean that steak will likely cost a lot more this fall. The price of feed has increased 50 percent and hay has doubled from two years ago
Based on this information, which of the following is TRUE in the market for beef? A) Consumer surplus will decrease. B) Producer surplus will increase. C) Equilibrium price will decrease. D) Equilibrium quantity will increase.
If Jenna buys a CD at a price of $10, she gets a consumer surplus of $20 . This means she
a. does not have enough money to buy the CD b. will not buy the CD since marginal utility is not high enough c. was willing to pay as much as $30 for the CD d. was willing to pay as much as $20 for the CD e. will have $30 left over after she buys the CD