Question

9)

Which of the following was an effect of the price ceiling placed on gasoline in the U.S. in the 1970s?

9)

_______

1. A)
   

Car owners started buying luxury cars that were less fuel-efficient as the price of gas was very low.

1. B)
   

Those who valued gas the most were able to buy gas under the price ceiling.

1. C)
   

The inventory of unsold gas increased and gas stations incurred losses.

1. D)
   

Gas stations ran out of gas as the quantity of gas demanded exceeded the quantity supplied.

10)

Other things remaining same, a left shift in the demand curve will lead to:

10)

______

1. A)
   

a decrease in the equilibrium price and an increase in the equilibrium quantity.

1. B)
   

an increase in the equilibrium price and the equilibrium quantity.

1. C)
   

a decrease in the equilibrium price and the equilibrium quantity.

Answer 1

a) "D"

At a price ceiling, the demand will be more than the supply and it will cause a shortage in the market.

b) "C"

it will reduce the demand and it will also reduce the quantity.