Which of the following would cause an increase in the price of gasoline and an expansion in the equilibrium quantity?
a. an increase in the price of crude oil, a key ingredient required for the production of gasoline
b. the introduction of a miracle carburetor that substantially improves the gas mileage of automobiles
c. a recession that substantially reduces the income of households
d. an increase in the popularity and use of Sport Utility Vehicles that consume a lot of gasoline per mile driven
D
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If a regional trading agreement causes products from member countries to replace imports from nonmember countries, then the regional trading agreement will experience:
a. economic gains. b. trade creation gains. c. trade diversion losses. d. trade perversion
Unemployment that results from fundamental technological changes in production, or from the substitution of new goods for customary ones, is
a. the natural rate of unemployment b. not counted as detracting from full employment c. cyclical unemployment d. frictional unemployment e. structural unemployment