An Increase in the Demand for Peanut Butter, a Normal

question 256

Multiple Choice

An increase in the demand for peanut butter, a normal good, can be caused by a(n) :

• A) decrease in consumer income.
• B) increase in the price of jams, jellies, and preserves.
• C) decrease in the price of bread.
• D) drought in Georgia that destroyed 30 percent of the peanut crop.
• E) decrease in the price of bologna.

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Definitions:

Capital

Resources or assets used for the production of goods and services, often including tools, machinery, and buildings.

Mixers

Devices used for blending ingredients together, commonly found in cooking, baking, and cocktail making.

Diseconomies of Scale

A condition in which a firm’s average costs increase as production increases.

Returns to Scale

The change in output as a result of proportionately changing all inputs in the production process, indicating increasing, constant, or decreasing returns.