Crude oil can be refined into home heating oil or gasoline. If very cold weather caused the price of home heating oil to increase then, the
A) supply of gasoline would increase.
B) demand for gasoline would increase.
C) equilibrium price of gasoline would rise.
D) Both answers A and C are correct.
C
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Jim Smith would like to work, but has not looked for work in the past four weeks because he does not believe any jobs are available. In the official employment statistics, Jim is classified as:
A. underemployed. B. unemployed. C. employed. D. out of the labor force.
The fraction of an industry's sales that are accounted for by the largest firms is called
A) the four-firm oligopoly ratio. B) the four-firm competition ratio. C) the four-firm industry ratio. D) the four-firm concentration ratio.
During a period of inflation, the Fed is likely to:
a. sell government securities to banks in order to reduce the amount of loanable funds. b. buy government securities from banks in order to reduce the amount of loanable funds. c. raise taxes in order to reduce the money supply. d. cut the required reserve ratio in order to reduce the amount of excess reserves banks have to loan out. e. cut the discount rate in order to increase the affordability of loanable funds.
A firm recently doubled in size and experienced a reduction in the average total cost of production, as it was able to spread its fixed costs over a larger quantity of output. Which of the following should be the correct strategy of the firm after expansion? a. The firm should continue to grow slowly to see if sustained growth leads to greater economies of scale. b. The firm should continue to
grow rapidly to see if rapid growth leads to greater economies of scale. c. The firm should continue to grow exponentially to see if exponential growth leads to greater economies of scale. d. The firm should sell off portions of the business to profit from the economies of scale already received.