ch 5 (2)

ch 5 (2) - 1

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Suppose an ice storm knocks down power lines and it is announced on the news that the local area would be without power for one week. We would expect to see A) an increase in the price and quantity of power generators. B) a decrease in the price and quantity of power generators. C) an increase in the price of generators and a decrease in their sales. D) a decrease in the price of generators and an increase in their sales. Feedback: The power outage would increase the demand for generators. This would lead to an increase in price and quantity. If gas prices fell sharply, what would economists expect to happen in the market for fuel-efficient hybrid cars? A) an increase in the price and quantity of hybrid cars. B) a decrease in the price and quantity of hybrid cars. C) an increase in the price of hybrid cars and a decrease in their sales. D) a decrease in the price of hybrid cars and an increase in their sales. Feedback: Lower gas prices would likely decrease the demand for fuel efficient cars. This would lower prices and sales. Housing prices have been rising sharply over the past few years. At the same time, sales of new homes have reached record highs. Which of the following explains this 
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This note was uploaded on 09/11/2011 for the course TERM 1 taught by Professor Smith during the Spring '11 term at FIT.

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ch 5 (2) - 1

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