In the following figure, the first panel shows a market situation prior to regulation and the second panel shows the effects of regulation.Figure 14.2
In the figure,
D: Demand curve for automobiles
S 1 : Supply curve of automobiles prior to regulation
S 2 : Supply curve of automobiles after regulation
FG: Clean up cost per unit
-When studying the market for resources, it is important to understand that:
A)resources are wanted not for themselves, but for what they produce.
B)demand for resources is generally inelastic in nature.
C)derived demand does not apply to the resource market.
D)resource markets do not conform to the laws of supply and demand as other markets do.
E)supply is much more important than demand in determining the price of a resource.

Question

In the following figure, the first panel shows a market situation prior to regulation and the second panel shows the effects of regulation.Figure 14.2
  In the figure,
D: Demand curve for automobiles
S 1 : Supply curve of automobiles prior to regulation
S 2 : Supply curve of automobiles after regulation
FG: Clean up cost per unit
-When studying the market for resources, it is important to understand that:
A)resources are wanted not for themselves, but for what they produce. 
B)demand for resources is generally inelastic in nature. 
C)derived demand does not apply to the resource market. 
D)resource markets do not conform to the laws of supply and demand as other markets do. 
E)supply is much more important than demand in determining the price of a resource.

Quizplus · Accepted Answer

The Answer is A

In the Following Figure, the First Panel Shows a Market