-(Exhibit: Demand and Supply of Gasoline)Given the Equilibrium After a Change

question 112

Multiple Choice

-(Exhibit: Demand and Supply of Gasoline) Given the equilibrium after a change in supply from S₁ to S₂:

• A)at the old price of $2.50, there will be pressure for the price to fall.
• B)the new price will be $2.00.
• C)the new quantity will be 600.
• D)all of the above are true.

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Definitions:

Marginal Productivity Theory

An economic theory suggesting that payment to factors of production equals the value of their marginal contribution to the production process.

Equilibrium Value

The price at which the quantity of goods supplied is equal to the quantity of goods demanded in a market.

Factor Of Production

Inputs employed in the production of goods and services, typically classified as land, labor, capital, and occasionally entrepreneurship.

Average Product

The output per unit of input, such as labor or capital, used in the production process.