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
-An automobile manufacturer uses land, labor, capital, and entrepreneurial ability to produce cars and trucks. If the price of trucks increases, the automobile manufacturer would not _____.
A)pay a lower wage rate to labor
B)increase truck production
C)hire more workers
D)increase capital used in production
E)increase land used in production

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
-An automobile manufacturer uses land, labor, capital, and entrepreneurial ability to produce cars and trucks. If the price of trucks increases, the automobile manufacturer would not _____.
A)pay a lower wage rate to labor 
B)increase truck production 
C)hire more workers 
D)increase capital used in production 
E)increase land used in production

Quizplus · Accepted Answer

If the price of trucks increases, the manufacturer would likely increase production, hire more workers, and use more capital and land to meet demand. However, they would not pay a lower wage rate to labor, as this is not directly influenced by the price of trucks.

In the Following Figure, the First Panel Shows a Market