Refer to the graph above. If the price increases from P1 to P2, then the gain in total revenue is areas:
A. C + F + H and the loss in total revenue is area J.
B. E + F + G and the loss in total revenue is area J.
C. B + E and the loss in total revenue is areas H + I + J.
D. A + B + C and the loss in total revenue is areas G + I + J.
Answer: A
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A consumer optimum is characterized by
A) the marginal rate of substitution of one good divided by its price equal to the marginal rate of substitution of the other good divided by its price. B) the marginal rate of substitution equal to unity. C) the marginal rate of substitution equal to the ratio of the prices of the two goods. D) the marginal rate of substitution divided by the price ratio of the two goods equal to the income of the consumer.
If the debt of the federal government increases by $10 billion in one year, the budget:
A. deficit in that year increased by $10 billion. B. deficit in that year must be $10 billion. C. surplus in that year must be $10 billion. D. surplus in that year decreased by $10 billion.