Higher Oil Prices Represent Higher Energy Costs in General Across

Multiple Choice

Higher oil prices represent higher energy costs in general across the economy leading to increased use of bicycles and public transportation. Which answer BEST describes the idea that changes in one market can produce effects in previously unseen markets?

A) The rise in the demand for bicycles causes a rise in the price of bicycles.
B) Increased bicycle demand increases the demand for rubber to make bicycle tires. Farmers in Southeast Asia switch from rice to rubber production and the price of rice increases.
C) The greater demand for public transportation offsets the demand for heating oil.
D) The rise in the demand for oil causes a rise in the demand for bicycles.