Suppose the demand for large (and therefore high-gasoline consumption) cars decreases sharply during an energy crisis. The most likely market adjustment would be
a. a sharp rise in the price of large cars in the short run as people rush to purchase these vehicles before producers cut back on manufacturing them.
b. a moderate increase in short-run prices, followed by a larger long-run price increase as the supply of large cars is depleted.
c. lower short-run prices, which will lead to an expansion in the number of large cars sold.
d. a decrease in the price of large cars in the short run, leading to a reduction in output, which will moderate the price decline in the long run.
D
You might also like to view...
Use the information in the table above plus the fact that indirect taxes less subsidies are $10 billion and depreciation is $30 billion to calculate the value of GDP
A) $180 billion B) $150 billion C) $140 billion D) $130 billion
Assume that the demand curve for DVD players shifts to the left and the supply curve for DVD players shifts to the right, but the supply curve shifts more than the demand curve. As a result
A) both the equilibrium price and quantity of DVD players will decrease. B) the equilibrium price of DVD players will decrease; the equilibrium quantity may increase or decrease. C) the equilibrium price of DVD players may increase or decrease; the equilibrium quantity will increase. D) the equilibrium price of DVD players will decrease; the equilibrium quantity will increase.
A franchise is
A) a firm that buys and operates a brand name business in a new market. B) a branch of a national company. C) a firm with the legal right to sell a good or service in a particular area. D) a firm with no competitors.
"There should be less discrimination against women" is an example of a positive statement
a. True b. False