Suppose a firm in each of the two markets listed below were to increase its price by 15 percent. In which pair would the firm in the first market listed experience a dramatic decline in sales, but the firm in the second market listed would not?

Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $3, what changes in the market would result in an economically efficient output?

A) The price would decrease, the quantity supplied would increase, and the quantity demanded would decrease. B) The price would decrease, quantity demanded would increase, and quantity supplied would decrease. C) The price would decrease, the demand would increase, and the supply would decrease. D) The quantity supplied would decrease, the quantity demanded would increase, and the equilibrium price would decrease.

According to the definitions of national saving and private saving, if Y, C, and G remained the same, an increase in taxes would

a. raise both national saving and private saving. b. raise national saving and reduce private saving. c. leave national saving and private saving unchanged. d. leave national saving unchanged and reduce private saving.