Suppose in a Financial Crisis, Major Automakers Reduce Their Production

question 156

Multiple Choice

Suppose in a financial crisis, major automakers reduce their production of autos while consumers reduce their demand for autos. We can conclude with certainty that in the market of autos,

• A)both the equilibrium price and equilibrium quantity will increase.
• B)the equilibrium price will decrease and the equilibrium quantity will increase.
• C)the equilibrium price will decrease, but the equilibrium quantity will increase, decrease or remain unchanged.
• D)the equilibrium quantity will decrease, but the equilibrium price will increase, decrease or remain unchanged.
• E)both the equilibrium price and equilibrium quantity will decrease.

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Definitions:

Global Trade Agreements

Treaties or agreements between countries that facilitate trade and economic cooperation on a global scale.

Toxic Materials

Substances that are harmful or deadly to living organisms when introduced or absorbed.

Electronic Devices

Equipment that uses the principles of electronics to function, including smartphones, computers, and televisions.

Toxic Waste

Hazardous materials requiring careful disposal to protect human health and the environment.