Oil and Natural Gas can each be used as a source of energy and are, for many purposes interchangeable. Which of the following best explains the increase in the price of natural gas that accompanied the increase in the price of oil during the 1990-1991 Persian Gulf War?
a. Increased oil prices raised demand for natural gas, a substitute good.
b. Increased oil prices raised the quantity demanded of natural gas by movement along the natural gas demand curve.
c. Increased oil prices reduced supply of natural gas, a substitute good.
d. Increased oil prices reduced supply of natural gas, an alternate good.
e. Increased oil prices raised supply of natural gas, a substitute good.
A
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
A common mistake made by consumers is the failure to take into account the sunk costs of their actions
Indicate whether the statement is true or false
The bid is the price at which the trader is willing to sell foreign currency.
a. true b. false
Given the production possibility tables for First and Second Bakeries shown, we can determine that:First BakerySecond BakeryCookiesPiesCookiesPies018091012306206603300900
A. Second Bakery has a comparative advantage in the production of pies. B. First Bakery has a comparative advantage in the production of pies. C. First Bakery has a comparative advantage in the production of both goods. D. neither bakery has a comparative advantage.