The Chunnel Auto Tunnel Allows Motorists to Travel Between England

question 223

Multiple Choice

The Chunnel auto tunnel allows motorists to travel between England and France. As an alternative, there is ferry service across the English Channel. What would happen in the market for ferry service if fees for using the Chunnel were increased?

• A) The demand for ferry service would increase.
• B) The demand for ferry service would decrease.
• C) There would be an upward movement along the demand curve for transits through the Chunnel.
• D) There would be a downward movement along the demand curve for transits through the Chunnel.

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Definitions:

Expected Rate

A forecasted value, often referring to interest or growth rates, based on current and historical data.

Expected Rate

In finance, it typically refers to the predicted average rate of return on an investment over a specified period.

Standard Deviation

A statistical measure that quantifies the amount of variability or dispersion of a set of data values around the mean (average).

Risk-Free Asset

A financial instrument that is considered to have no risk of financial loss and typically features a guaranteed rate of return, such as government bonds.