Table 211 Depicts the Market for Mushrooms (In Thousands of Kilograms

question 119

Multiple Choice

Table 2.11 depicts the market for mushrooms (in thousands of kilograms per month) .

-What is the effect of a shortage?

• A)It will cause a decrease in the price,leading to an increase in the quantity supplied and a decrease in the quantity demanded.
• B)It will cause a decrease in the price,leading to a decrease in the quantity supplied and an increase in the quantity demanded.
• C)It will cause an increase in the price,leading to an increase in the quantity supplied and a decrease in the quantity demanded.
• D)It will cause an increase in the price,leading to a decrease in the quantity supplied and an increase in the quantity demanded.

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Definitions:

Government Purchases

Expenditures by government entities on goods and services that directly fulfill governmental functions or public needs.

Taxes

Mandatory contributions to state revenue, levied by the government on workers' income and business profits or added to the cost of some goods, services, and transactions.

Aggregate Demand Curve

A graph showing the relationship between the total quantity of goods and services demanded across all sectors of an economy and the overall price level.

Net Exports

The value of a country's total exports minus the value of its total imports; it is a component of a country's gross domestic product.