"A reduction in gasoline prices caused the demand for gasoline to increase. The lower gas prices also led to an increase in demand for large cars, causing their prices to rise." These statements
a. are essentially correct.
b. contain one error; the lower gasoline prices would cause an increase in the quantity demanded of gasoline, not an increase in demand.
c. contain one error; the lower gasoline prices would increase the quantity demanded of large cars, not the demand.
d. contain two errors; the lower gasoline prices would cause the quantity of gasoline demanded (rather than the demand) to increase, and the lower gasoline price would cause an increase in quantity demanded (rather than the demand) for large cars.
B
You might also like to view...
Over the past decade, the demand for goods produced in China has brought a sustained increase in demand for China's exports that has out-stripped the growth of supply. As a result, China has experienced a _______
A. period of stable prices and sustained economic growth B. rising price level and demand-pull inflation C. rising price level and cost-push inflation D. rising price level and a falling real wage rate
Refer to Scenario 2. The marginal cost of the sixth unit of output is:
A) $1.33. B) $7.50. C) $8.00. D) $45.00.