Asked by Olivia Wilma on May 29, 2024
Verified
In the 1990s,many people had rising incomes.At the same time,there was a rise in the cost of lumber.This would cause the demand for houses to _________ and the supply for houses to_________.
A) Increase,increase
B) Increase,decrease
C) Decrease,increase
D) Decrease,decrease
Rising Incomes
An economic condition where individuals or populations experience an increase in their disposable income, often leading to changes in spending habits and economic growth.
Cost of Lumber
The expense associated with purchasing wood used for construction and manufacturing, which can vary based on supply and demand.
Demand
The quantity of a good or service that consumers are willing and able to purchase at various price levels at a given point in time.
- Explore the influence of income fluctuations on patterns of consumption.
- Understand the impact of external elements such as natural calamities and input expenses on the supply in the market.
Verified Answer
DS
Dylan SpeicherJun 04, 2024
Final Answer :
B
Explanation :
If there is a rise in the cost of lumber, the cost of building a house increases. As a result, the supply of houses would decrease as the cost to produce each house has gone up. However, people still have rising incomes and may be willing to pay more for a house, leading to an increase in demand. Therefore, the demand for houses would increase while the supply for houses would decrease.
Learning Objectives
- Explore the influence of income fluctuations on patterns of consumption.
- Understand the impact of external elements such as natural calamities and input expenses on the supply in the market.