Refer to Figure 5-3. The efficient output level is

Whenever there is a difference in the same exchange rate offered in two markets, an arbitrageur would:

a. wait for the markets to come to equilibrium. b. buy in the market where the currency is offered at the cheaper rate,and simultaneously sell the currency where the rates are higher. c. sell the cheaper-rate currency in the home market. d. not consider the trade, since prices would undoubtedly change before it could be executed.

There has recently been an increase in the price of dairy products used in the production of ice cream. High temperatures have also induced people to consume more ice cream. In the market for ice cream, the effects these changes will have on equilibrium

price and quantity are A) price will increase, and quantity will decrease. B) price will increase, and the effect on quantity is indeterminate. C) price will decrease, and quantity will increase. D) price will decrease, and the effect on quantity is indeterminate.