Orange juice drinkers want to consume more orange juice at a lower price. Which of the following events would have this effect?
A) a decrease in the price of orange juice processing
B) an increase in the cost of fertilizer used for orange groves
C) a decrease in income, assuming orange juice is a normal good
D) a decrease in the population
Answer: A
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The FOMC is concerned about inflation and has ________ the federal funds rate. Due to substitution effects, other ________ interest rates will ________ almost immediately
A) increased; short-term; increase B) decreased; short-term; decrease C) increased; long-term; increase D) decreased; long-term; decrease E) increased; short-term; decrease
Luxury brands like designer sunglasses are goods that may exhibit snob effects. Suppose this is true, and the price for a particular brand increases. What happens to the component changes in the quantity demanded?
A) Pure price effect and snob effect are negative B) Pure price effect and snob effect are positive C) Pure price effect is positive, snob effect is negative D) Pure price effect is negative, snob effect is positive