1. Let's suppose (hypothetically) that the equilibrium price of gasoline has increased recently. Which of the following combinations of changes in demand and supply best explains this price increase?

a. Demand has increased significantly, and supply has increased by the same amount.

b. Demand has decreased slightly, and supply has increased .

c. Demand has increased slightly, and supply has increased significantly.

d. Demand has increased significantly and supply has increased slightly

e. Demand has decreased a lot, and supply has decreased slightly.

2.A shortage of a product or service occurs when:

a. The price of the product is set below the equilibrium price.

b. The price of the product is set above the equilibrium price

c.The price of the product is set at the intersection of the demand and supply schedule.

d.The price of the product is set higher than the government controlled price.