Questions: Back to Assignment Attempts Keep the Highest / 1 23. Questions and Problems 26 When speeding tickets were 100, usually 500 speeders were on the roads each month in a given city; when tickets were raised to 250, usually 215 speeders were on the roads in the city each month. Which of the following statements capture the economics in this observation? Check all that apply. - The law of demand holds for speeding. - The law of supply holds for speeders. - This observation is consistent with decreasing opportunity costs.

The answer is the first one: The law of demand holds for speeding.

Explanation for each option:

1. The law of demand holds for speeding.

   • Correct. The law of demand states that, all else being equal, as the price of a good or service increases, the quantity demanded decreases. In this case, as the price of speeding (in the form of higher fines) increased from $100 to $250, the number of speeders decreased from 500 to 215. This observation is consistent with the law of demand.

2. The law of supply holds for speeders.

   • Incorrect. The law of supply states that, all else being equal, as the price of a good or service increases, the quantity supplied increases. This principle applies to producers or suppliers of goods and services, not to consumers or individuals engaging in an activity like speeding. Therefore, this statement does not apply to the given scenario.

3. This observation is consistent with decreasing opportunity costs.

   • Incorrect. Decreasing opportunity costs refer to a situation where the cost of forgoing the next best alternative decreases as more of a good is produced. This concept is not relevant to the scenario of speeding and fines. The observation is about the relationship between the price of speeding (fines) and the quantity of speeders, not about opportunity costs.

Summary: The correct statement that captures the economics in this observation is that the law of demand holds for speeding. As the fine for speeding increased, the number of speeders decreased, which is consistent with the law of demand.