Right Points Earned 11 Correct Answera Your Response A 40 Think About Two - ECON200

RightPoints Earned:1/1 Correct Answer:A Your Response:A 40.Think about two products, "safe cars" (a heavy car such as a BMW 530xi with infrared night vision, four-wheel antilock brakes, and electronic stability control) and "dangerous cars" (a lightweight car without much in the way of safety features). If new research makes it easier to produce safe cars and the price of safe cars falls, how does this affect the market for dangerous cars? A.There will be a decrease in the quantity demanded of dangerous cars. B.The demand for dangerous cars will decrease. C.There will be an increase in the quantity demanded of dangerous cars. D.The demand for dangerous cars will increase. Correct. The easier production of safe cars will cause the supply of safe cars to increase, shifting the supply curve to the right and lowering the equilibrium price of safe cars. Because safe cars and

dangerous cars are substitute goods, this will also lower the demand for dangerous cars as people substitute away from them and into the now-cheaper safe cars. RightPoints Earned:1/1 Correct Answer:B Your Response:B 41.If oil executives read in the newspaper that massive new oil supplies have been discovered under the Pacific Ocean but that these supplies won't be available until 10 years from now, what is likely to happen to the supply of oil today? What is the likely equilibrium impact on the price and quantity of oil today?