Final answer:
The automobile industry (option A) is an example of a highly cyclical industry, with demand influenced by economic expansions and recessions, which leads to fluctuations in production and employment.
Step-by-step explanation:
An example of a highly cyclical industry is A. the automobile industry. Cyclical industries are closely tied to the economic cycles of expansion and recession. The automobile industry experiences fluctuations in demand corresponding to the economic climate. During economic expansions, consumers are more likely to make significant purchases such as cars. However, during recessions, demand for automobiles tends to drop sharply as consumers cut back on spending. This cyclical nature contrasts with industries like tobacco, pharmaceuticals, and utilities, which tend to have more stable demand regardless of the economic cycle.
Specific characteristics of the automobile industry, such as significant economies of scale and a history as an essential part of U.S. manufacturing centered in Detroit, Michigan, contribute to its cyclicity. The presence of entrepreneurial engineers like Ransom Olds and Henry Ford facilitated innovation and mass-market production strategies making cars affordable during periods of economic growth. However, when demand falls, such as with reduced construction leading to layoffs among landscapers, this industry can suffer greatly, much like it did in the past when the U.S. experienced depressions, leading to high unemployment and inflation.