In 2010, a British Petroleum oil rig exploded in the Gulf of Mexico. The explosion resulted in a major oil spill and a decrease in the supply of oil. At the same time, the average price of gasoline decreased. Which of the following best explains the
decrease in the price of gasoline?
A) The quantity demanded of gasoline increased.
B) The demand for gasoline decreased, and the effect of the decrease in demand on the gasoline price was greater than the price effect of the decrease in supply.
C) The demand for gasoline increased, and the effect of the increase in demand on the gasoline price was less than the price effect of the decrease in supply.
D) The demand for gasoline remained unchanged.
Answer: B
You might also like to view...
The total costs of federal regulation
A) encompasses only explicit costs of satisfying regulatory demands. B) also includes the explicit costs associated with regulations issued by 50 different state governments. C) encompasses only opportunity costs of satisfying regulatory demands. D) encompasses both explicit and opportunity costs of satisfying regulatory demands..
Both the Latin American countries and the sub-Saharan countries have poor economic growth records due to
A) climate. B) geography. C) colonization. D) arbitrary governance. E) indifference from the World Bank.