If Demand Increases and Supply Decreases, Quantity Will

question 148

Multiple Choice

If demand increases and supply decreases, quantity will

• A)always increase
• B)always decrease
• C)increase only if supply decreases more than demand increases
• D)increase only if supply decreases less than demand increases
• E)decrease only if supply decreases less than demand increases

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Definitions:

World Demand

The total need or desire for goods and services across the global market.

Comparative Advantage

The knack of entities, whether they are people, companies, or countries, to bring forth goods or services at opportunity costs that undercut those of competitors.

Opportunity Costs

Opportunity Costs represent the benefits that are foregone by choosing one option over an alternative one.

Specialization

The focus by an individual, firm, or country on producing a limited range of goods or services, often to improve efficiency and productivity.