When the nominal price of a good increases over time, the real cost of buying the good
A) must increase.
B) decreases because income also increases over time.
C) does not change because income also increases over time.
D) might increase, decrease, or stay the same depending on how much the CPI changed.
E) might increase, decrease, or stay the same depending on how much income changed.
D
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All shredded wheat producers have decided to add a new ingredient to shredded wheat, the "crunch enhancer." Crunch enhancer keeps cereals crisper longer in milk and, as a result, consumers decide they like shredded wheat more than before
What happens to the supply and demand curves for shredded wheat now that is costs more to produce and consumers like it better? A) The supply and demand curves both shift rightward. B) The supply curve shifts rightward and the demand curve doesn't shift. C) The supply curve shifts leftward and the demand curve shifts rightward. D) The supply curve shifts leftward and the demand curve doesn't shift.
Which of the following is NOT an example of moral hazard in business?
A) A bank buys risky mortgage securities because they believe the government will provide a bail-out if the investment performs badly. B) A firm uses venture capital to speculate in the commodity futures market. C) A firm does not hire adequate security protection for its warehouse after it pays for insurance on the property. D) Firms with the large debt problems are more likely to apply for bank loans than financially stable firms.