An Increase in Demand and a Decrease in Supply Occur

question 147

Multiple Choice

An increase in demand and a decrease in supply occur in a market. What happens to the equilibrium price and quantity?

• A) The equilibrium price decreases; the change in the equilibrium quantity is uncertain.
• B) The equilibrium price decreases; the equilibrium quantity increases.
• C) The equilibrium price increases; the change in the equilibrium quantity is uncertain
• D) The equilibrium price increases; the equilibrium quantity decreases.

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Definitions:

Fighting Words

Words which by their very utterance inflict injury or tend to incite an immediate breach of the peace, not protected by free speech.

First Amendment

An addition to the United States Constitution that prohibits the government from interfering with freedom of religion, speech, assembly, and the press.

Incite

To encourage or stir up violent or unlawful behavior.

Substantial Government Interest

A significant justification employed by the government to enforce regulations, usually in areas impacting health, safety, and welfare.