Table 4-B -Refer to Table 4-B

question 72

Multiple Choice

Table 4-B
$\begin{array}{ccc}\text { Price per gallon } &\text { Quantity Demanded }&\text { Quantity Supplied of } \\&\text { (thousands of gallons) }&\text { gasoline (thousands of }\\&&\text { gallons) }\\\$ 4.50 & 600 & 2,000 \\\$ 4.25 & 700 & 1,900 \\\$ 4.00 & 800 & 1,800 \\\$ 3.75 & 950 & 1,700 \\\$ 3.50 & 1,200 & 1,600 \\\$ 3.25 & 1,500 & 1,500 \\\$ 3.00 & 1,800 & 1,400 \\\$ 2.75 & 2,100 & 1,300 \\\$ 2.50 & 2,400 & 1,200\end{array}$

-Refer to Table 4-B.The government imposes a $3.25 price ceiling at the same time there is a substantial decrease in the price of sport utility vehicles.(Assume that sport utility vehicles get very low mileage per gallon.) As a result, the:

• A)price of gasoline equals $3.25 per gallon and the quantity demanded equals the quantity supplied.
• B)price of gasoline rises above $3.25 per gallon and a surplus of gasoline is created.
• C)price of gasoline will fall below $3.25 per gallon and a shortage of gasoline is created.
• D)legal price of gasoline will equal $3.25 per gallon and a shortage of gasoline is created.
• E)market price and quantity traded of gasoline will both increase.

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Definitions:

Francis Ferdinand

Archduke Franz Ferdinand of Austria was the heir to the Austro-Hungarian Empire, whose assassination in 1914 sparked the beginning of World War I.

German Government

The political leadership and institutions that govern Germany, including the federal and state levels, following democratic and legal principles.

Austria-Hungary

A multinational empire in Central Europe formed by a dual monarchy of Austria and Hungary, which existed from 1867 until its dissolution in 1918 following World War I.

Triple Alliance

A military coalition formed by Germany, Austria-Hungary, and Italy in 1882, aimed at mutual defense and support in case of attack by other powers.