When inflation occurs, consumers
a. realize gains in their wealth.
b. increase spending to catch up with higher prices.
c. automatically shift the consumption line upward.
d. suffer a decrease in real wealth.
d
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Refer to Figure 4-5. The figure above represents the market for pecans. Assume that this is a competitive market. If the price of pecans is $3, what changes in the market would result in an economically efficient output?
A) The price would increase, the quantity demanded would decrease, and the quantity supplied would increase. B) The price would increase, the demand would decrease, and the supply would increase. C) The price would increase, the quantity supplied would decrease, and the quantity demanded would increase. D) The quantity supplied would increase, the quantity demanded would decrease, and the equilibrium price would increase.
All of the following result from price floors in agriculture EXCEPT
A) surpluses of agricultural products that have price floors. B) higher prices to consumers for agricultural products that have price floors. C) lower prices to consumers for agricultural products that have price floors. D) governmental bureaucracy.