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. 

Assume that a consumer purchases a combination of products Y and Z and that the MUy/Py = 25 and MUz/Pz = 20. To maximize utility, without spending more money, the consumer should:

A. Purchase less of Y and more of Z B. Purchase more of Y and less of Z C. Purchase more of both Y and Z D. Make no change in Y and Z

Suppose some people like national defense and others are offended by it -- i.e. some people derive positive marginal benefit and others derive negative marginal benefit. Efficiency then demands that national defense is produced until the sum of the positive marginal benefits is equal to the (absolute value) of the negative marginal benefits.

Answer the following statement true (T) or false (F)