For each event given below, respond to the following points using the determinan

Question

For each event given below, respond to the following points using the determinants of demand and supply:

A. Determine whether demand or supply changes or if the event instead causes a change in quantity demanded or quantity supplied.
B. State whether the change is an increase or decrease.
C. List the determinant that led you to that conclusion.

Events
1. The price of oil increases because OPEC reduces oil production.
2. The tax on gasoline consumption increases.
3. Firms start producing more fuel efficient vehicles and produce fewer vehicles that use fuel inefficiently.
4. Summer arrives and more people choose to take vacations.
5. The price of gasoline increases.

Explanation / Answer

a-changes b-quantity c-decrease Event-3. Firms start producing more fuel efficient vehicles and produce fewer vehicles that use fuel inefficiently.

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