Below are quotes from each of the four students. all of the, Ask an Expert

Economics

Four students from your economics class are sitting in a local restaurant discussing the market for coffee. Below are quotes from each of the four students. All of the following quotes are logically correct except one. Which quote indicates incorrect economic analysis?

A. Kendra: "If the price of caffeinated soft drinks such as Mountain Dew went down, then consumer demand for coffee would go down, since coffee and carbonated soft drinks are substitutes for each other."

B. Nicholas: "If Brazil is hit hard by such a severe freeze that half of its crop of coffee beans is wiped out, then the price of coffee will probably rise."

C. Sam: "If the demand for coffee were to increase, then I would expect the price to rise, which would then cause the demand curve to return to its original position."

D. Tanya: "If coffee drinkers expect the price of coffee to rise NEXT month, then current demand will go up, and this will lead to a price increase THIS month."

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M971410

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