-The Table Above Shows the Situation in the Gasoline Market

question 41

Multiple Choice

-The table above shows the situation in the gasoline market in Tulsa,Oklahoma.If the price of a gallon of gasoline is $3.62,then

• A) there is a surplus of gasoline in Tulsa.
• B) there is a shortage of gasoline in Tulsa.
• C) the gasoline market in Tulsa is in equilibrium.
• D) Without more information we cannot determine if there is a surplus, a shortage, or an equilibrium in the gasoline market in Tulsa.
• E) There is neither a surplus nor a shortage, but the market is NOT in equilibrium.

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Definitions:

Comparative Advantage

Comparative advantage is an economic principle that posits a country or entity can produce a good or service at a lower opportunity cost than another, leading to more efficient trade possibilities.

Opportunity Cost

Forgoing the possibility of profit from various alternatives by choosing a specific one.

Production

The method of merging different tangible and intangible inputs (like designs and expertise) to produce an item meant for consumption (known as the output).

Opportunity Cost

The cost of foregone alternatives when one option is chosen over another.