Question

Suppose an economic boom drives up wages for the sales representatives who work for cell phone companies. This will cause the:________.
a) supply of cell phones to increase; the price of cell phones would decrease and the quantity of cell phones traded would rise.
b) supply of cell phones to decrease; the price of cell phones would increase and the quantity of cell phones traded would fall.
c) demand for cell phones to decrease, and both the price of cell phones and the quantity of cell phones traded would fall.
d) demand for cell phones to increase, and both the price of cell phones and the quantity of cell phones traded would rise.

Answer 1

Answer: b. supply of cell phones to decrease; the price of cell phones would increase and the quantity of cell phones traded would fall.

Explanation:

An economic boom is when there's rapid economic expansion which brings about increase in the gross domestic product, higher inflation and lower unemployment.

If economic boom drives up wages for the sales representatives who work for cell phone companies, this will bring about a reduction in the supply of cellphones by the supplier and since there's a decrease, the prices of the available cellphones will increase because there'll be higher demand for lower.goods which invariably shoot up the price and also, the number of cell phones that are being traded will reduce.