If Supply Decreases and Demand Increases

question 29

Multiple Choice

If supply decreases and demand increases

• A) the market clearing price definitely rises, and the equilibrium quantity falls.
• B) the market clearing price definitely rises, and the equilibrium quantity is indeterminate.
• C) the market clearing price definitely falls, and the effect on the equilibrium quantity is indeterminate.
• D) the effect on the market clearing price is indeterminate, and the equilibrium quantity definitely falls.

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Definitions:

Third-Country Nationals

Employees who are working in a country that is neither their home country nor the country of the company they are working for.

Multinational Companies

Corporations that own or control production or service facilities outside the country in which they are based, operating in several countries around the world.

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Individuals residing and working in a country other than their native country, usually for professional or employment reasons.

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Employees who are citizens of the country in which a multinational company operates, but the company itself is based in another country.