Which of the following statements is true?
A) If higher water prices encourage a landlord to place bricks in the water tanks of his toilets to reduce water usage, then for him bricks are substitutes for water.
B) If higher gasoline prices encourage a potential vacationer to stay at home and read a good book by the fire, rather than drive through the country, then for her firewood is a substitute for gasoline.
C) Both A and B are true.
D) None of the above are true.
C
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Explain how the market for gasoline would react to this price ceiling if the oil-producing nations increased production and drove the equilibrium price of gasoline to $2.50 a gallon. Would the U.S. gasoline market be effi-cient?
What will be an ideal response?
Ajax Corporation has just decided to let managers work from home one day a week. This decision will make working conditions better and will
A) cause the demand curve for labor for managers to increase. B) increase the elasticity of demand for labor for managers. C) lead to an increase in the supply curve of labor for managers. D) leave the supply curve of labor unchanged.