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Unformatted text preview: shortage at the going market price. Using economic theory, explain what will happen overtime to the price of air conditioners and the shortage. 3. Slippery Slope is a local ski resort with plans to build new condominiums for guests next year. In order to start building, Slippery Slope must raise additional revenue. What should Slippery Slope do-- raise the price of their lift tickets OR lower the price of their lift tickets? Explain. 4. In the 1970s, the OPEC oil embargo cut supplies of Middle Eastern oil to the United States drastically. As a result, gasoline prices shot way up. Studies show that in the first six months of this crisis there was a relatively small decrease in gasoline purchases. However, after six months gasoline purchases dropped considerably. How do you explain the difference between the short-term demand and long-term demand for gasoline?...
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This note was uploaded on 02/17/2011 for the course ECN 203 taught by Professor Evensky during the Spring '07 term at Syracuse.
- Spring '07
- Supply And Demand