Question

Using the information provided, what can we conclude about the goods?

1) The quantity of good x increased by 20 and the price increased by 60, while the quantity of good y increased by 20 and the price increased by 40.
2) The quantity of good x increased by 20 and the price increased by 60, while the quantity of good y increased by 20 and the price increased by 40.
3) The quantity of good x increased by 20 and the price increased by 60, while the quantity of good y increased by 20 and the price increased by 40.
4) The quantity of good x increased by 20 and the price increased by 60, while the quantity of good y increased by 20 and the price increased by 40.

Answer 1

The information suggests that as the price of cars increased from $20,000 to $22,000, the quantity supplied also increased from 18 million to 20 million cars, illustrating the law of supply as shown on the supply curve So.

Step-by-step explanation:

Based on the provided information, we can analyze the supply curve and the relationship between the price of goods and the quantity supplied. In the case of cars, as the price increases from $20,000 to $22,000, the quantity supplied increases from 18 million to 20 million, demonstrating the law of supply. The law of supply states that, ceteris paribus, an increase in price results in an increase in the quantity supplied. This concept is represented by the upward movement from point J to point K on the supply curve So in Figure 3.10 or Table 3.5.