Question

If professors at University of Alberta begin giving A's to students in exchange for whiskey, we would expect the price of whiskey to __________ and the quantity sold of whiskey to __________. increase; increase ) | increase; decrease | decrease; decrease | decrease; increase. | none of the above.

Answer 1

If professors at the University of Alberta exchange grades for whiskey, the demand for whiskey would rise, resulting in an increase in both the price and the quantity sold of whiskey.

Step-by-step explanation:

If professors at the University of Alberta begin giving A's to students in exchange for whiskey, we would expect the price of whiskey to increase and the quantity sold of whiskey to increase. This would happen because the professors are creating additional demand for whiskey, assuming that students are willing to participate in this exchange to secure better grades. As the demand for whiskey rises, the price will go up due to the increased willingness to pay for it. Simultaneously, suppliers will likely increase production to meet the higher demand, leading to an increase in the quantity sold.