When a conflict arises in a major oil-exporting area of the world, such as the Middle East, the price of gasoline already in the storage tanks at local gas stations usually increases. Which of the following best explains this occurrence?
a. Gas station owners anticipate consumers will buy more gasoline as gasoline prices increase.
b. Gas station owners are attempting to repeal the laws of supply and demand.
c. Gas station owners anticipate higher replacement costs for their supply of gasoline and, therefore, raise their prices in response to this higher expected cost.
d. A decline in consumer demand generally causes gas station owners to raise their prices.
C
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What is the main role of banks?
a. Accepting deposits from individuals b. Making loans to business c. Acting as a financial intermediary between savers and borrowers d. Acting as a depository institution for savers
Which central coordination task has claimed the most attention of central planners?
a. Output selection b. Production planning c. Distribution d. Rationing
Refer to the above graph. What combination would most likely cause a shift from AD1 to AD3?
A. An increase in taxes and a decrease in government spending B. A decrease in taxes and a decrease in government spending C. An increase in taxes and an increase in government spending D. A decrease in taxes and an increase in government spending
The concept of opportunity cost is based on the principle of
A. scarcity. B. consumption. C. need. D. profit.