Suppose the Price of Oil Has Recently Increased, Making It

question 152

Multiple Choice

Suppose the price of oil has recently increased, making it more expensive to manufacture ride-on lawn mowers. This oil price increase also makes it more expensive to run a ride-on mower. What is likely to happen to the market for ride-on lawn mowers as a result in the changing price of oil?

• A) Supply and demand will increase, increasing equilibrium quantity and having an indeterminate effect on price.
• B) Supply and demand will decrease, decreasing equilibrium quantity and having an indeterminate effect on price.
• C) Supply and demand will increase, increasing equilibrium price and having an indeterminate effect on quantity.
• D) Supply and demand will decrease, increasing equilibrium price and having an indeterminate effect on quantity.

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Definitions:

Strict Liability

A legal principle that holds parties responsible for damages or harm caused by their actions, without the need for proving negligence or fault.

Obstacles to Recovery

Factors or circumstances that hinder or prevent an individual or entity from recovering from a loss or injury.

Section 402A

A section of the Restatement (Second) of Torts that established the principle of strict liability for defective products, making manufacturers and sellers liable for damages caused by defective products.

Implied Warranty of Fitness

A legal assumption in many jurisdictions that a product sold will be suitable for the particular purpose for which the buyer intends to use it.