Related to the Economics in Practice on Page 77: If

question 5

Multiple Choice

Related to the Economics in Practice on page 77: If a hurricane results in the supply of hotel rooms decreasing and the equilibrium price for hotel rooms increases, the demand for hotel rooms ________ and total revenue from the sale of hotel rooms ________.

• A) has decreased; will decrease
• B) has decreased; may increase, decrease, or stay the same
• C) may have increased, decreased, or stayed the same; will decrease
• D) may have increased, decreased, or stayed the same; may increase, decrease, or stay the same

---

Definitions:

Opportunity Costs

Opportunity Costs represent the benefits that are foregone by choosing one option over an alternative one.

Specialization

The focus by an individual, firm, or country on producing a limited range of goods or services, often to improve efficiency and productivity.

Mutually Beneficial

A situation or transaction where all parties involved gain or benefit from the arrangement.