Refer to the Above Graph, Which Shows the Market for Bicycles

question 84

Multiple Choice

Refer to the above graph, which shows the market for bicycles. S₁ and D₁ are the original supply and demand curves. D₂ and D₃ and S₂ and S₃ are possible new demand and supply curves. Starting from the initial equilibrium (point 1) , which point on the graph is most likely to be the new equilibrium after an increase in wages of bicycle workers, and a significant increase in the price of gasoline?

• A) 6
• B) 3
• C) 4
• D) 5

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Definitions:

Planning

The process of outlining business objectives, strategies, and actions to achieve those objectives.

Treasury Bonds

Long-term government securities issued with the promise of payment upon maturity with a fixed interest rate.

Return

The income generated from an investment or the gain from an asset relative to the investment's or asset's cost.

Risk

The potential for losing something of value or the chance of an action leading to an undesirable outcome.