Suppose the Demand for Large (And Therefore High-Gasoline Consumption) Cars

question 113

Multiple Choice

Suppose the demand for large (and therefore high-gasoline consumption) cars decreases sharply during an energy crisis. The most likely market adjustment would be

• A) a sharp rise in the price of large cars in the short run as people rush to purchase these vehicles before producers cut back on manufacturing them.
• B) a moderate increase in short-run prices, followed by a larger long-run price increase as the supply of large cars is depleted.
• C) lower short-run prices, which will lead to an expansion in the number of large cars sold.
• D) a decrease in the price of large cars in the short run, leading to a reduction in output, which will moderate the price decline in the long run.

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Definitions:

Parietal Lobe

A region of the brain located at the upper back area in the skull, crucial for processing sensory information from various parts of the body, understanding spatial orientation, and navigation.

Frontal Lobe

The part of the brain located at the front of the cerebral cortex, responsible for executive functions such as decision-making, problem-solving, and controlling behavior and emotions.

Occipital Lobe

The region of the cerebral cortex located at the back of the brain, responsible for processing visual information.

Prefrontal Cortex

The part of the brain located at the front of the frontal lobe, responsible for decision-making, problem-solving, and regulating behavior.