Lobbying can shape regulations through:

Assume the auto market is initially in equilibrium with imports from Japan taking up a significant share of the market. Now assume a quota on imports of Japanese cars is established

What will occur at the initial equilibrium price to signal market participants regarding the change that has taken place? A) A surplus is created by an increase in supply. B) A surplus is created by a decrease in demand. C) A shortage is created by an increase in demand. D) A shortage is created by a decrease in supply.

Two economists from Ohio University estimated that the demand curve for kerosene in Indonesia was such that a 10 percent increase in the price reduced the quantity demanded by 2.2 percent and that a 10 percent increase in the price of electricity increased the demand for kerosene by 1.6 percent. This indicates that (i) the demand for kerosene is price inelastic and (ii) kerosene and electricity

are substitutes. Which of these two statements is correct? a. i and ii b. i not ii c. ii not i d. neither i nor ii