"If the price of crude oil falls, the demand for gasoline will increase, so people will by more gas and the price of gas will go u
What will be an ideal response?
The analysis is false. If the price of crude oil falls, the supply of gasoline increases, because crude oil is a resource used to produce gasoline. The prices of resources used to produce the good influence its supply, not demand. So, if the price of oil falls, the supply of gasoline increases and the supply curve shifts rightward. The equilibrium price of gasoline falls. It is true that people will buy more gasoline, but this happens not because the demand increases, but because a lower price results in a movement down the demand curve so that the quantity demanded increases.
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Georgine buys more sweaters when her income increases. For Georgine, sweaters are
A) a substitute. B) a complement. C) an inferior good. D) a normal good.
There is an average price for a used car that accounts for both good used cars and bad used cars ("lemons"). At the current market price for used cars, the persons __________ likely to offer their used cars for sale are people who own __________.
A. most; "lemons" B. least; good used cars C. least; "lemons" D. a and b E. There is not enough information to answer the question.
For the utility function U = Wa, what values of "a" correspond to being risk averse, risk neutral, and risk loving?
What will be an ideal response?
If both supply and demand increase, then the change in equilibrium quantity is indeterminate
a. True b. False