Figure 2.1.2 -Refer to Figure 2.1.2. If the Price of Coffee Decreases

question 89

Multiple Choice

Figure 2.1.2
-Refer to Figure 2.1.2. If the price of coffee decreases, from $7.50 to $6.00 per pound, which of the following will occur?

• A) The quantity demanded of coffee will increase, from 6 to 7 million pounds per year.
• B) The demand curve will shift to the right and the quantity demanded will increase to 10 million pounds per year.
• C) Both moves, from A to B and then from B to C, will occur simultaneously.
• D) It is possible that the market demand will show the move fro A to B, or that it moves directly from A to C.

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Definitions:

Money Supply

The entirety of monetary resources accessible in an economy during a specific period.

Rational

Characterized by clear and logical thinking, often with regard to fulfilling one's personal goals or making decisions based on empirical evidence and reasoning.

Unemotional Self-interest

Refers to actions motivated purely by personal gain without regard to emotions or moral considerations.

Q

Generally denotes quantity in economic and mathematical models, referring to the amount of goods or services.