An increase in input costs in the production of electric automobiles caused the price of electric automobiles to rise. Holding everything else constant, how would this affect the market for gasoline-powered automobiles (a substitute for electric
automobiles)?
A) The supply of gasoline-powered automobiles would increase and the equilibrium price of gasoline-powered automobiles would decrease.
B) The demand for gasoline-powered automobiles would increase and the equilibrium price of gasoline-powered automobiles would increase.
C) The demand for gasoline-powered automobiles would decrease because consumers could afford to buy fewer gasoline-powered automobiles.
D) The demand for gasoline-powered automobiles would increase and the equilibrium price of gasoline-powered automobiles would decrease.
Answer: B
You might also like to view...
Refer to Table 14-5. Does Henri have a dominant strategy? If yes, what is it?
A) Yes, Henri's dominant strategy is to not offer free pickup and delivery. B) Yes, Henri's dominant strategy is to offer free pickup and delivery. C) Yes, Henri's dominant strategy is to wait and see what Ming does first. D) No, Henri does not have a dominant strategy - his best outcome depends on what Ming does.
An import quota is an example of
A) a price ceiling. B) a price floor. C) a queuing device. D) a quantity restriction.
Among the world’s major industrial countries, the nation with the lowest unemployment rate in 2010 was
a. Germany. b. the United States. c. Japan. d. France.
An open-market purchase
a. increases the number of dollars and the number of bonds in the hands of the public. b. increases the number of dollars in the hands of the public and decreases the number of bonds in the hands of the public. c. decreases the number of dollars and the number of bonds in the hands of the public. d. decreases the number of dollars in the hands of the public and increases the number of bonds in the hands of the public.