Author Question: Draw a graph to illustrate the effect of higher gasoline prices on the demand for large SUVs. What ... (Read 138 times)

cabate

  • Hero Member
  • *****
  • Posts: 537
Draw a graph to illustrate the effect of higher gasoline prices on the demand for large SUVs. What is the relationship between gasoline and SUVs?
 
  What will be an ideal response?

Question 2

Suppose that you lend 1,000 to a friend and he or she pays you back one year later. What is the opportunity cost of lending the money?
 
  A) the nominal interest rate that would have been earned on the money
  B) There is no cost.
  C) the implicit cost of the money
  D) the real interest rate that would have been earned on the money


tashiedavis420

  • Sr. Member
  • ****
  • Posts: 329
Answer to Question 1

Gasoline and SUVs are complements. When the price of gasoline rises it becomes more expensive to drive an SUV, and so the demand for SUVs is likely to decrease (people may switch to smaller, more fuel-efficient vehicles). Note that as a result of the decrease in demand for SUVs their price should decrease and so should the quantity of SUVs sold.

Answer to Question 2

D



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question


 

Did you know?

More than 30% of American adults, and about 12% of children utilize health care approaches that were developed outside of conventional medicine.

Did you know?

Less than one of every three adults with high LDL cholesterol has the condition under control. Only 48.1% with the condition are being treated for it.

Did you know?

Computer programs are available that crosscheck a new drug's possible trade name with all other trade names currently available. These programs detect dangerous similarities between names and alert the manufacturer of the drug.

Did you know?

Today, nearly 8 out of 10 pregnant women living with HIV (about 1.1 million), receive antiretrovirals.

Did you know?

The tallest man ever known was Robert Wadlow, an American, who reached the height of 8 feet 11 inches. He died at age 26 years from an infection caused by the immense weight of his body (491 pounds) and the stress on his leg bones and muscles.

For a complete list of videos, visit our video library