Refer to Figure 4-2. What area represents the decrease in producer surplus when the market price falls from P2 to P1?

A) B + D B) A + B C) C + E D) A + C + E

B

Economics

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A rise in the price level changes aggregate demand because

A) firms increase their investment when prices are higher. B) the real value of people's wealth varies directly with the price level and so does their spending. C) the real value of people's wealth decreases and so they decrease their consumption. D) the more money people have, the more it is worth and hence the more goods and services they demand.

Economics

Some hotels in Myrtle Beach, South Carolina charge over $200 a night in the summer but sometimes as little as $99 a night in the winter. Use supply and demand analysis, including graphical and verbal explanation, for these winter "sales."

Economics