Figure 5-2
In Figure 5-2, consumer surplus is measured by the area
a.
ABC.
b.
OBCD.
c.
OACD.
d.
DCE.
a
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If the value of the cross elasticity of demand is negative, the two goods are
A) complementary goods. B) substitute goods. C) normal goods. D) inferior goods.
After the Civil War, many Southern farmers fell into a long-run spiral of debt caused by
a. the monopoly power of country stores. b. the monopoly power of railroads. c. excessive interest rates charged by banks. d. carpetbaggers.
Firms that sell highly differentiated consumer goods, such as over-the-counter drugs, soft drinks, breakfast cereals, and dog food, typically spend between 10 and 20 percent of revenue for
An increase in government purchases of $200 billion will shift the aggregate demand curve to the right by
A) $200 billion. B) less than $200 billion. C) more than $200 billion. D) None of the above are correct. This policy shifts the long-run aggregate supply curve.