Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.

For the CPI to provide an accurate measure of the prices paid by urban consumers, it is necessary to

A) have a market basket that is consistent and corresponds to what households actually purchase. B) make certain that the incomes of the consumers surveyed do not change because such a change would affect the market basket of the goods and services they buy. C) change the market basket each month to reflect the changes that consumers make. D) assign equal weights to all the goods and services included in the market basket surveyed so that nothing is over-weighted. E) have prices stated in dollars so consumers can compare what they spend.

How does the construction of a market demand curve for a private good differ from that for a public good?

A) There is no difference; in both cases the demand curve is determined by adding up the price each consumer is willing to pay for each quantity of the good. B) The market demand curve for a private good is determined by adding up the price each consumer is willing to pay for each quantity of the good but the market demand curve for a public good is determined by adding up the quantities demanded by each consumer at each price. C) There is no difference; in both cases the demand curve is determined by adding up the quantities demanded by each consumer at each price. D) The market demand curve for a private good is determined by adding up the quantities demanded by each consumer at each price but the market demand curve for a public good is determined by adding up the price each consumer is willing to pay for each quantity of the good.