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

If electricity demand is inelastic, and electric rates increase, which of the following is likely to occur?

A) Quantity demanded will fall by a relatively large amount. B) Quantity demanded will fall by a relatively small amount. C) Quantity demanded will rise in the short run, but fall in the long run. D) Quantity demanded will fall in the short run, but rise in the long run.

In the real business cycle model, an increase in current total factor productivity

A) increases investment demand. B) decreases investment demand. C) has no impact on investment demand. D) has an ambiguous effect on investment demand.