Which of the Following Statements Is True

question 37

Multiple Choice

Which of the following statements is true?

• A)The supply of oil is very elastic over short time periods but becomes perfectly inelastic over time. A given shift in supply results in a greater increase in the price of oil when the supply of oil is perfectly inelastic.
• B)The supply of oil is very inelastic over short time periods but becomes more elastic over time. A given shift in supply results in a smaller increase in the price of oil when the supply is more elastic.
• C)The supply of oil is perfectly inelastic; therefore, as the demand for oil increases over time the price of oil increases significantly.
• D)Over short periods of time increases in the demand for oil are greater than increases in the supply of oil. Over the long run increases in the demand and the supply of oil are about equal. As a result, the price of oil increases greatly in the short run but is stable in the long run.

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Definitions:

Advanced Analysis

The application of sophisticated methods and techniques in the assessment, evaluation, and understanding of complex subjects or data.

Equilibrium Price

The market price at which the quantity of a good supplied equals the quantity demanded, leading to a stable market condition.

Price Ceilings

Government-imposed limits on how high a price can be charged for a product or service, aimed at protecting consumers.

Ration Coupons

Documents or certificates that allow the holder to purchase a certain amount of a product, used especially during shortages to ensure fair distribution.