Test: AP Microeconomics

1.

Energy can be generated using either coal or natural gas as an input. If the supply of coal is interrupted, what are the most likely effects on the price and quantity of natural gas traded on the open market? Assume a perfectly competitive market with no government policy intervention.

Price increases, Quantity increases

Price decreases, Quantity decreases

Price decreases, Quantity increases

Price increases, Quantity decreases

No change

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