�建 Microsoft Word �档

�建 Microsoft Word �档 - 1. "A...

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1. "A reduction in gasoline prices caused the demand to increase. The lower prices led to an increase in demand for large cars, causing their price to rise." This statement a. is essentially correct. b. contains one error the lower gasoline prices would cause a reduction in demand for large cars, not an increase. c. contains one error the lower gasoline prices would increase the quantity demanded by consumers, not the demand. d. contains two errors the lower gasoline prices would cause the quantity demanded (rather than demand) to increase, and the lower gasoline price would reduce (rather than increase) the demand for large cars. 2. "If gasoline sales were taxed, the price of gasoline would rise. Consequently, the quantity demanded of gasoline would decline. As a result of the higher gasoline prices, the demand for fuel- efficient automobiles would increase." This statement is a. essentially correct. b. incorrect; the high gasoline prices would cause the demand for gasoline, not the quantity demanded, to fall. c. incorrect; the statement confuses a change in demand with a
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This note was uploaded on 04/11/2011 for the course ECO 2252 taught by Professor Edward during the Fall '08 term at Troy.

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�建 Microsoft Word �档 - 1. "A...

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