Some Environmental Groups Are on Record Suggesting That the Price

question 101

Multiple Choice

Some environmental groups are on record suggesting that the price of gasoline should be much higher than it was in the early 1990s.Why might they say this?

• A) They own stock in oil companies.
• B) They anticipate that the longer the price is high, the more elastic the response by consumers will be.
• C) They anticipate that the longer the price is high, the less elastic the response by consumers will be.
• D) They anticipate that higher prices will reduce the price elasticity of supply of oil.

---

Definitions:

U.S. Dollar

The official currency of the United States, widely used as a standard of value and medium of exchange in global markets.

Foreign Exchange Market

A global marketplace for buying and selling national currencies.

Currency

The system of money in general use in a particular country, or the physical notes and coins themselves.

Short-Run Exposure

Financial risk associated with fluctuating exchange rates that affects a company's transactions or valuation in the near term.