If the price of coal, a close substitute for oil, decreases, then the
A. supply curve for oil will shift to the right.
B. demand curve for oil will shift to the right.
C. equilibrium price and quantity of oil will not change.
D. demand curve for oil will shift to the left.
E. supply curve of coal will shift to the left.
Answer: D
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An example of the principal-agent problem is when
A) managers try to cope with employees that are inefficient. B) proprietors don't receive any money payment for their entrepreneurial skills. C) managers devise penalties that eliminate employee waste. D) managers devise incentives that encourage employees to act in the owner's behalf.
In general, banks make profits by selling ________ liabilities and buying ________ assets
A) long-term; shorter-term B) short-term; longer-term C) illiquid; liquid D) risky; risk-free
Within a system of perfectly flexible exchange rates, an decrease in the United States demand for imports would result in a
a. rise in the exchange rate. b. fall in the exchange rate. c. balance of payments deficit. d. balance of payments surplus.
Deregulation is a process that undoes regulation
Indicate whether the statement is true or false