Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for coffee. What happens in this market if buyers expect the price of coffee to rise?

The Law of Diminishing Marginal Benefit states that:

A) the demand for a commodity declines as its price increases. B) the demand for a commodity is more dependent on income than on price. C) the willingness to pay for an additional unit declines as more of a good is consumed. D) lower levels of consumption give lower level of utility.

According to the traditional Keynesian approach, a tax cut raises aggregate demand because

A) a tax cut always results in a balanced budget. B) taxes are part of the C + I + G + X line. C) taxpayers anticipate a tax increase in the future. D) disposable income available to consumers increases.