If the price of jelly (a complement with peanut butter) decreases, both the demand and supply curves of peanut butter will shift rightward
a. True
b. False
B
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Use the following graph to answer the next question.
Suppose the economy is in equilibrium at point C. A personal income tax cut would most likely
A. move the economy upward from point C along AD1. B. cause the AS curve to shift to the right. C. move the economy downward from point C along AD1. D. move the economy from point C toward point B.
Competition among sellers occurs
A) when marginal revenue equals marginal cost. B) when price equals marginal cost. C) when price equals marginal revenue. D) whenever sellers try to attract customers from one another.
Suppose the economy is at a short-run equilibrium GDP that lies below potential GDP. Which of the following will occur because of the automatic mechanism adjusting the economy back to potential GDP?
A) Output will decrease. B) Short-run aggregate supply will shift to the right. C) Unemployment will rise. D) Prices will increase.
Explain the difference between a change in demand and a change in quantity demanded. Be sure to specify what causes each to change and how they differ when graphed