Question

Refer to Exhibit, which shows supply and demand for freeway space at both 8 a.m. and 11 p.m. Suppose that the government decides to set the money price of driving on the freeway at zero, but creates programs that encourage drivers to carpool. If the carpooling program is sufficiently successful to eliminate the shortage of freeway space at 8 a.m., graphically the result of the increase in carpooling would be a:______.

a. rightward shift of the supply of freeway space curve.
b. leftward shift of the demand for freeway space curve from D8a.m. to D11p.m.
c. movement up along D8a.m. to the point where D8a.m. intersects the supply curve.
d. leftward shift of the supply of freeway space curve.

Answer 1

b. leftward shift of the demand for freeway space curve from D8a.m. to D11p.

Explanation: This graph would show a leftward shift of the demand for freeway space curve from D8.am to D11p because there would be an increase in carpooling which cause demand for freeway space to decrease.