Refer to Figure 10-9. Consider the budget constraint BC1. If the price of DVDs is $20 and the price of CDs is $10, what is the consumer's income?

The peak oil hypothesis says that the annual world production of oil

a. will not peak for several hundred years. b. peaked in the past two decades and is now rapidly declining. c. will peak in the coming decades and then decline. d. is now peaking and a major decline is imminent.

A price floor policy establishes a minimum price for a market, and the policy is said to be binding if the market equilibrium price is less than the floor price. What impact does a binding price floor have on the market outcome?

A. Shortage B. Excess demand C. Excess supply D. No impact, and the market price and quantity equal their equilibrium values