If Supply Decreases and Demand Increases

question 29

Multiple Choice

If supply decreases and demand increases

• A) the market clearing price definitely rises, and the equilibrium quantity falls.
• B) the market clearing price definitely rises, and the equilibrium quantity is indeterminate.
• C) the market clearing price definitely falls, and the effect on the equilibrium quantity is indeterminate.
• D) the effect on the market clearing price is indeterminate, and the equilibrium quantity definitely falls.

---

Definitions:

Critical Evaluation

The process of examining an issue or object critically to form an opinion or judgment after considering its strengths and weaknesses.

Strong Leader

A person who exhibits confidence, integrity, and a clear vision, and who possesses the ability to inspire and motivate others.

Irving Janis

A psychologist known for his theory of "groupthink," which describes the faulty decision-making process in cohesive groups.

Bay Of Pigs

The Bay of Pigs refers to an unsuccessful invasion of Cuba in 1961, where a CIA-sponsored paramilitary group sought to overthrow Fidel Castro.