Oil is used to produce gasoline. If the price of oil increases, consumer surplus in the gasoline market
a. decreases.
b. is unchanged.
c. increases.
d. may increase, decrease, or remain unchanged.
a
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? Assume that Figure 4-4 shows demand for orange juice. A decrease in the price of apple juice will change demand from
A. D1to D2. B. D2to D1. C. D2to D3. D. D1to D3.
In 2009, Congress passed a bill that involved government spending increases and tax cuts with the purpose of stimulating the U.S. economy. This policy is an example of
A) an automatic stabilizer. B) contractionary fiscal policy. C) expansionary fiscal policy. D) expansionary monetary policy.
If a demand shock causes an economy to operate at a point above potential GDP, then
a. the aggregate supply curve will shift to return the economy to the original point of equilibrium b. the economy will correct itself through rising wages and prices c. this short-run equilibrium point will become the new long-run equilibrium GDP d. the economy will correct itself through falling wage rates and prices e. the shock is said to be a negative demand shock
What occurs when a price changes and consumers have an incentive to consume less of the good with a relatively higher price and more of the good with a relatively lower price?
a. Budget constraint b. Consumer equilibrium c. Substitution effect d. Income effect