QUESTION 13 3.45 Pineapples and kumquats are substitute goods. A hurricane in Gu

Question

QUESTION 13 3.45 Pineapples and kumquats are substitute goods. A hurricane in Guatemala destroyed a good portion of the pineapple crop. Ceteris paribus O a the price of both b the price of kumquats will fall the price of kumquats willd the price of both ineapples increase and the price ofpineapples pineapples will fall and and the price of pineapples willincrease and the price of and increase increase QUESTION 14 Which of the following would an economist classify as capital? a corporate bond b a post office employeeCa guitar used by a musician id a $50 bill

Explanation / Answer

(Question 13) Option (d)

A destruction of pineapple stock will lower its supply, shifting its supply curve leftward, increasing its price. Since kumquals are substitutes, higher price of pineapples will increase the demand for kumquals, shifting its demand curve rightward which will increase its price.

(Question 14) Option (c)

The guitar used by a musician is a factor of production for the musician, treated as (physical) capital.

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