Suppose That the Market for Newspaper Is Initially in Equilibrium

question 40

Multiple Choice

Suppose that the market for newspaper is initially in equilibrium. Further suppose that there is both an increase in the price of ink and a decrease in the price of magazines, which people may read in place of a newspaper. Which of the following accurately describes the new equilibrium?

• A)The equilibrium price will rise; the equilibrium quantity is ambiguous.
• B)The equilibrium price is ambiguous; the equilibrium quantity will fall.
• C)The equilibrium price will fall; the equilibrium quantity is ambiguous.
• D)The equilibrium price is ambiguous; the equilibrium quantity will rise.

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Definitions:

Firecrackers

Small explosive devices primarily used for entertainment purposes, especially in celebrations, that create a loud noise when detonated.

Fourth Of July

An American holiday celebrated on July 4th, commemorating the Declaration of Independence from Britain in 1776.

Unconditioned Stimulus

An innate trigger that automatically elicits a response, without any requirement for previous learning.

Classical Conditioning

A training method where a previously insignificant stimulus is linked with a significant one, gaining the ability to provoke comparable reactions.