Every Spring, Motorists Do More Driving Than During the Winter

question 183

Multiple Choice

Every spring, motorists do more driving than during the winter months. Every spring, the price of gasoline increases and the motorists buy more gasoline. This experience suggests that the

• A) ʺlaw of demandʺ does not always hold for necessities like gasoline.
• B) laws of supply and demand are both contradicted for gasoline, though only during the spring driving season.
• C) ʺlaw of supplyʺ does not always hold for necessities like gasoline.
• D) None of the above answers are correct.

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Definitions:

Direct Labor

The labor costs directly associated with the production of goods or services, typically involving manufacturing or construction work.

Selling and Administrative Expenses

Costs associated with the selling of products and the management of the business.

Fixed Overhead

The total non-variable costs associated with operating a business, including rent, salaries, and insurance, that remain unchanged regardless of the level of production or sales.

Direct Labor

The wages and other forms of remuneration paid to employees who directly work on the products being manufactured, such as assembly line workers.