Which of the following is the best explanation for why the price of gasoline increases during the summer months?
A) Oil producers have higher costs of production in the summer.
B) Sellers have to earn profits during the summer to cover losses in the winter.
C) There is increased driving by families going on vacation.
D) There is less competition among oil refineries in the summer.
E) The number of gas stations open 24 hours a day rises in the summer months and so the price must rise to cover the higher costs.
C
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How does the relative price and a household's real income influence its budget line?
What will be an ideal response?
When a large number of people in society save more and it results in a decline in national income and an increase in unemployment this is known as
a. the fallacy of composition. b. moral hazard. c. the paradox of thrift. d. marginal analysis.
Assume that the expectation of a recession next year causes business investments and household consumption to fall, as well as the financing to support it. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and GDP Price Index in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period rises and GDP Price Index rises. b. The quantity of real loanable funds per time period falls and GDP Price Index falls. c. The quantity of real loanable funds per time period rises and GDP Price Index falls. d. The quantity of real loanable funds per time period and GDP Price Index remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Why are high domestic savings rates important?
What will be an ideal response?