Question

4. Which of the following will typically cause a decrease in the demand for automobiles? a.)...

4. Which of the following will typically cause a decrease in the demand for automobiles?

a.) an increase in gasoline prices

b.) an increase in consumers’ income

c.) consumer expectations that the price of automobiles will be higher next year.

d.) an decrease in the price of automobiles

"option (d) is NOT correct"

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Option A.

  • When the prices of gasoline which is a fuel used in most of the automobiles increases, the demand for automobiles decreases.
  • This is because the demand and prices are inversely related to each other and an increase in price of an intermediate good can lead to a decline in the demand for that good.
  • When the price of gasoline increases, people prefer using other means of cheaper transportation which decreases the demand for automobiles and thus shifts the demand curve to the left.
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Which of the following would likely increase the demand for gasoline-powered automobiles? A. the expectation by...
Which of the following would likely increase the demand for gasoline-powered automobiles? A. the expectation by consumers that electricity prices will be much higher in the future. B. the expectation by consumers that oil prices will be lower in the future. C. an increase in the price of public transportation. D. All of the above E. None of the above
Which of the following is most likely to cause the demand for ice cream, a normal...
Which of the following is most likely to cause the demand for ice cream, a normal good, to decrease? a- a decrease in the price of ice cream b-a decrease in the price of milk c-warmer weather d-an increase in the number of consumers e- a decrease in consumer income
Which of the following will cause a leftward shift (decrease) of the demand curve for houses?...
Which of the following will cause a leftward shift (decrease) of the demand curve for houses? Consumer expectations that the price of houses will increase next year An increase in consumer income An increase in mortgage interest rates Assume the a product has the market demand function QD = 20 – P and the market supply function QS = 6 + P. If a price ceiling is set at $8, then you will predict which of the following would result?...
2. Describe and briefly explain whether the following changes cause the aggregate demand to increase, decrease...
2. Describe and briefly explain whether the following changes cause the aggregate demand to increase, decrease or neither: a. The price level increases b. Investment decreases c. Imports increase and exports decrease d. Consumer optimism improves e. Government increases infrastructure spending f. Stock market crashes.
Which of the following will cause a movement along the demand curve instead of a shift...
Which of the following will cause a movement along the demand curve instead of a shift of the demand? curve? A. Income B. Expectations of the future price of a good C. Tastes and preferences D. none of the above
During the Great Recession, consumer sentiment in the United States declined, leading to a decrease in...
During the Great Recession, consumer sentiment in the United States declined, leading to a decrease in consumer spending. Which of the following factors caused this decrease in consumer sentiment? a. an increase in tax rates b. a decrease in expected income c. a decrease in the money supply d. an increase in household wealth e. falling gasoline prices During the Great Depression, aggregate demand in the U.S. economy decreased. As a result, the unemployment rate _________ and the price level...
Which of the following will cause the aggregate demand curve to shift to the left? A....
Which of the following will cause the aggregate demand curve to shift to the left? A.   A decrease in consumer and business confidence because of a terrorist attack. B. A decrease in the interest rate. C. A decrease in business taxes. D. An improvement in technology.
Assume there is a simultaneous increase in the number of consumers, a decrease in income (assume...
Assume there is a simultaneous increase in the number of consumers, a decrease in income (assume an inferior good), and an expectation by consumers of a higher price. Which of the following statements is correct a)More information is needed to answer this question. b)The equilibrium price will decrease, and the equilibrium quantity will decrease. c)The equilibrium price will increase, and the equilibrium quantity will decrease. d)The equilibrium price will decrease, and the equilibrium quantity will increase. e)The equilibrium price will...
Describe whether the following changes cause the aggregate demand curve to increase (shift right), decrease (shift...
Describe whether the following changes cause the aggregate demand curve to increase (shift right), decrease (shift left), or neither. (a) The price level increases. (b) Investment decreases. (c) Imports decrease and exports increase. (d) The price level decreases. (e) Consumption increases. (f) Government purchases decrease. Describe whether the following changes cause the long-run aggregate supply curve to increase (shift right), decrease (shift left), or neither. (a) The price level increases. (b) The stock of capital in the economy increases. (c)...
A decrease in the expected price level a. will cause the aggregate demand curve to shift...
A decrease in the expected price level a. will cause the aggregate demand curve to shift to the left but an increase in the actual price level does not cause shifting. b. will cause the aggregate demand curve to shift to the right but an increase in the actual price level will not cause shifting. c. will cause the aggregate demand curve to shift to the left and an increase in the actual price level will also cause shifting to...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT