Which of the Examples Given Below Illustrates How Changes in Resource

question 108

Multiple Choice

Which of the examples given below illustrates how changes in resource prices help determine supply?

• A)An increase in the cost of oil reduces the numbers of trucks carrying goods to certain locations.
• B)An increase in the number of trucks carrying goods to certain locations increases the number of goods available in those areas.
• C)An anticipated decrease in the costs of truck maintenance may indicate a future decrease in the number of trucks carrying goods.
• D)The establishment of high-speed railways with energy-efficient freight trains may render trucks obsolete.

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Definitions:

Inferior Good

A type of good for which demand decreases when consumers' income increases, opposite to normal goods.

Perfectly Inelastic

Describes a situation where the demand for a good does not change in response to a change in price.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, defined as the percentage change in quantity demanded divided by the percentage change in price.

Demand Curve

A diagram displaying the connection between a product or service's price and the amount requested over a specified timeframe.