Studies have shown that drinking one glass of red wine per day may help prevent heart disease. Assume this is true, and a fungal disease destroys a large portion of the grape harvest of California vineyards
In the market for red wine, these two developments would
A) increase demand and decrease supply resulting in a decrease in both the equilibrium quantity and the equilibrium price of red wine.
B) increase demand and increase supply, resulting in an increase in the equilibrium quantity and a decrease in the equilibrium price of red wine.
C) increase demand and decrease supply, resulting in an increase in both the equilibrium price and the equilibrium quantity of red wine.
D) increase demand and decrease supply, resulting in an increase in the equilibrium price and an uncertain effect on the equilibrium quantity of red wine.
D
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With regard to preventing entry, if identical firms act simultaneously,
A) they cannot credibly threaten each other. B) they will all incur losses. C) only one firm will enter the market. D) none of them will enter the market.
Which of the following statements is FALSE?
A) Economic goods are available in desired quantities at a zero price. B) A good is anything that gives satisfaction or happiness to individuals. C) Services are intangible goods such as dry cleaning, hospital care, and restaurant meal preparation. D) Wants are unlimited and include all material and nonmaterial desires.