Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.

Refer to the figure above. What is the total surplus before Barylia opens up to free trade?

A) $250 B) $325 C) $800 D) $1,125

Which of the following statements is true about a consumer's optimal decision when indifference curves are concave?

A) Both goods are consumed. B) No goods are consumed. C) Only one of the goods is consumed. D) It occurs at the point of tangency with the budget line.