Higher oil prices represent higher energy costs in generalacross the economy leading to increased use of bicycles andpublic transportation. Which answer best describes the ideathat changes in one market can cause effects in previouslyunseen markets?
A) The rise in the demand for bicycles causes a rise in the price of bicycles.
B) Increased bicycle demand increases the demand for rubber to make bicycle tires.Farmers in South East Asia switch from
Rice to rubber production and the price of rice increases.(True
Answer ) Correct
C) The greater demand for public transportation offsets the demand for heating oil.
D) The rise in the demand for oil causes a rise in the demand for bicycles.
Correct Answer:
Verified
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