Refer to the figure above. What is the quantity effect of a price reduction from $6 to $4?
A) $600
B) $800
C) $1,000
D) $1,200
B
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Suppose the current price of oil is $90 a barrel and the quantity supplied is 800 million barrels per day
If the price elasticity of supply for oil in the short run is estimated at 0.5, use the midpoint formula to calculate the percentage change in quantity supplied when the price of oil rises to $98 a barrel.
Assume:
C = 40 + 0.8(Y - T) G = 10 I = 20 T = 0, where T are taxes. (a) Calculate Y at equilibrium. (b) Calculate C, I, and G at equilibrium. (c) Now assume, EX = 5 + 4EP /P IM = 10 + 0.1 (Y - T) - 3EP /P E = 3 P = 1.5 P = 2 Find equilibrium Y.
Domestic aggregate surplus:
A. is the sum of consumer surplus, deadweight loss and government revenue. B. is the sum of domestic producer surplus and government revenue. C. is the sum of domestic producer surplus and consumer surplus. D. is the sum of consumer surplus, domestic producer surplus and government revenue.
The law of demand states that consumers buy more of a good when its price declines:
A. even if other demand determinants change at the same time. B. only if their income increases at the same time. C. provided all else remains constant. D. because their income increases at the same time.