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Economic Analysis of Social Issues 1st Edition by Alan Grant
Edition 1ISBN: 978-0134098371Economic Analysis of Social Issues 1st Edition by Alan Grant
Edition 1ISBN: 978-0134098371 Exercise 12
Determine the effects of the following events on the price and quantity of coffee sold. Assume that coffee is a normal good.
a. The price of tea, a substitute for coffee, increases.
b. The price of doughnuts, a complement to coffee, increases.
c. Congress mandates a $20/hour minimum wage for baristas.
d. Consumers' incomes fall as the economy sours.
e. Coffee growers discover that they can make more money raising corn than they can growing coffee.
a. The price of tea, a substitute for coffee, increases.
b. The price of doughnuts, a complement to coffee, increases.
c. Congress mandates a $20/hour minimum wage for baristas.
d. Consumers' incomes fall as the economy sours.
e. Coffee growers discover that they can make more money raising corn than they can growing coffee.
Explanation
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Normal good:
Normal goods are those, th...
Economic Analysis of Social Issues 1st Edition by Alan Grant
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