The following appeared in a Florida newspaper a week after a hurricane hit the state. "Floridians are relieved that the storm produced no fatalities but homeowners face weeks, if not months, of rebuilding. Matters are made worse by the soaring prices of plywood and other building materials that always follow in a hurricane's path. Complaints of profiteering and price gouging have not deterred firms from raising their prices by over 100 percent." Which of the following offers the best explanation for the price increases referred to in the article?
A) The hurricane caused an increase in the demand for building materials.
B) The hurricane created an artificial shortage of building materials.
C) There was a reduction in supply as firms shipped plywood and other materials to locations not affected by the storm.
D) The hurricane reduced the number of suppliers of building materials.
A
You might also like to view...
A union-sponsored television campaign urging U.S. consumers to "Look for the union label" is designed to
A) increase the productivity of union labor. B) increase the derived demand for union labor by shifting consumer preferences in favor of union-made goods. C) raise wages by restricting the supply of union workers. D) remind consumers that if they do not buy union-made goods, unions will strike.
Compared to workers in poor countries, workers in richer countries have
a. lower productivity but higher wages. b. higher productivity and higher wages. c. higher productivity but lower wages. d. the same productivity but higher wages.