Suppose That the EPA Has Proposed Strict Controls on the Amount

question 173

Multiple Choice

Suppose that the EPA has proposed strict controls on the amount of sulfur that diesel fuel contains. These controls were designed to fully offset the cost of pollution generated by diesel fuel vehicles. The effect of the regulation is estimated to increase the equilibrium price of a gallon of diesel fuel by 10 cents. Assuming that the supply of diesel fuel has a positive slope and demand has a negative slope, the quantity of diesel fuel sold after imposition of the regulation will:

• A)remain the same.
• B)increase.
• C)decrease.
• D)decrease only if diesel fuel is a normal good.

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Definitions:

Social Support

The assistance and comfort received from friends, family, and others, which can be emotional, informational, or tangible.

Individual Differences

Refers to the unique variations among people in their abilities, personality traits, learning styles, and other characteristics.

Stress

A state of mental or emotional strain resulting from adverse or demanding circumstances.

Hans Selye

A pioneering Hungarian-Canadian endocrinologist known for his research on the stress response and for defining the General Adaptation Syndrome, a theory of stress and the body's way of adapting to it.