Other things held constant, when the general price level changes:
a. we move along the aggregate demand curve.
b. we shift the aggregate demand curve to the right.
c. we shift the aggregate demand curve to the left.
d. we shift the aggregate supply curve to the right.
e. we shift the aggregate demand curve to the left.
a
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Which of the following creates a positive externality?
a. a paper mill polluting a river b. a stock market crash c. a neighbor that beautifies her lawn d. taxes and subsidies e. the greenhouse effect
Which of the following best defines consumer surplus?
a. the amount that individuals actually paid, minus the amount that they would have been willing to pay b. the amount that a seller is paid for a good minus the seller’s actual cost c. the amount that individuals would have been willing to pay, minus the amount that they actually paid d. when it is impossible to improve the situation of one party without imposing a cost on another