The price of coffee increases. Which of the following is NOT part of the likely chain of events that follows from this price change?
A) Some coffee consumers reduce their consumption of coffee.
B) Coffee producers increase their production of coffee.
C) The producers of coffee beans increase production.
D) The manufacturers of coffee machines lay off some workers.
Answer: D
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Explain the concepts of cross-price elasticity of demand and income elasticity of demand. What do positive and negative values indicate for each of these demand elasticities?
What will be an ideal response?
According to Robert Gordon (1969, 1999), the extraordinary expansion of physical production in 1942–45 was achieved by
(a) massive government investment in new plants and equipment. (b) finally bringing into production manufacturing plants and equipment that had been idle since the early 1930s so that big government investment was not necessary. (c) the Federal Reserve's peg on the bond market, which enrolled the private sector to mobilize the necessary capital to invest in new plant and equipment. (d) none of the above.