True and False question:
1) Law of demand says that there is an inverse relationship between the price and quantity demanded. As price decreases, quantity demanded increases. In this case, it says the price of home heating was cheaper (decreased), but people bought less than (decreased). This is against to law of demand. So this statement is TRUE, it is contradicts to Law of Demand.
2) Some question came up in my mind that “what happens to number of economists in the future if more people study economics now?” I personally think that number of economist increases, it means supply of economists increases. It is similar to when there are more goods or service, its price will decrease. In this case, the prices of economists are their wage. Since there are more economists, their wage will fall because people can select among many economists and reduce their wage rate so this statement is FALSE because supply and demand model has more to say about what happens to wage rate in the future.
At $ 0.50 per gallon buyers will want 10,000 per week but the store will only have 100 gallons => so there is a shortage here. Similarly to this case, the same thing will happen in the market for credit. If the price of credit, called interest rate is below the equilibrium rate then suppliers of credit will reduce the amount of credit they offer while demanders will want more. So instead of $ 0.50 put 1% there. That is cheap credit. A lot of people will want to borrow especially those with a