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The following sets of statements contain common errors. Identify and explain each error: a. Supply decreases, causing prices to rise. Higher prices cause supply to
The following sets of statements contain common errors. Identify and explain each error: a. Supply decreases, causing prices to rise. Higher prices cause supply to increase. Therefore, prices fall back to their original levels. b. The supply of pineapples in Hawaii increases, causing pine- apple prices to fall. Lower prices mean that the demand for pineapples in Hawaiian households will increase, which will reduce the supply of pineapples and increase their price.
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