For the United States to become less dependent on foreign sources of oil,
A) The cross-price elasticity for alternative energy sources is negative.
B) The price of alternative energy sources such as wind and solar has to rise.
C) Incomes in the United States must increase.
D) The price of oil and gasoline must increase to shift businesses and consumers over to alternative energy sources.

Question

Quizplus · Accepted Answer

If the price of oil and gasoline increases, it becomes more expensive for businesses and consumers to use them. This creates an incentive for them to switch to alternative energy sources, such as wind and solar power. As demand for these alternative sources increases, their prices will likely drop due to economies of scale and innovation, making them more competitive with traditional energy sources. Therefore, shifting to alternative energy sources in response to a price increase in oil and gasoline is likely to decrease the US's dependence on foreign oil.

For the United States to Become Less Dependent on Foreign