Suppose There Is a Temporary Increase in the Price of Oil

question 85

Multiple Choice

Suppose there is a temporary increase in the price of oil. This is represented by

• A) a leftward shift of the SAS and the LAS curve.
• B) a leftward shift of the LAS curve.
• C) a rightward shift of the SAS curve.
• D) a leftward shift of the SAS curve.

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Definitions:

Levied

Imposed or collected, usually referring to taxes, duties, or other charges by an authority.

Demand Curve

A chart that illustrates the connection between a product's cost and the amount of the product customers are prepared to buy at different price levels.

Equilibrium Quantity

The amount of products or services available and sought at the balance price, where the supplied quantity matches the demanded quantity.

Tax Revenue

The revenue collected by governments via taxes, which is allocated to finance public services and meet governmental duties.