Orange Juice and Apple Juice Are Substitutes

question 34

Multiple Choice

Orange juice and apple juice are substitutes.Bad weather that sharply reduces the orange harvest would

• A)increase consumer surplus in the market for orange juice and decrease producer surplus in the market for apple juice.
• B)increase consumer surplus in the market for orange juice and increase producer surplus in the market for apple juice.
• C)decrease consumer surplus in the market for orange juice and increase producer surplus in the market for apple juice.
• D)decrease consumer surplus in the market for orange juice and decrease producer surplus in the market for apple juice.

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Definitions:

Economic Competition

A condition in markets where businesses or sellers independently strive for consumer's dollars by offering the best possible terms, leading to efficient resource allocation.

Command Systems

Economic systems where the government controls key sectors of the economy, determining what goods are produced, their prices, and distribution.

Invisible Hand

A term coined by Adam Smith to describe the self-regulating nature of the marketplace, where individuals' pursuit of self-interest leads to the benefit of society at large.