Refer to Figure 7-23. The equilibrium price is

Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 

A. D; C B. B; C C. B; A D. D; B

An economy in which output has decreased and prices have increased would suggest that there has been a:

A. negative demand side shock. B. negative supply side shock. C. positive demand side shock. D. positive supply side shock.

Why are patents important to those who hold them?

A. Without patents, there would be considerably more price discrimination in the market. B. Without patents, there will no longer be economies of scale in production. C. Patents act as a barrier to entry, allowing monopoly profits. D. Patents actually do not matter because they do not guarantee that a firm will make a profit.

Oil price changes are best explained using a model of

A. supply and demand, the effect of expectations, and the cartel effect. B. the cartel effect. C. supply and demand and the effect of expectations. D. the collusive behavior of the big oil companies.