When the Demand Curve Shifts Rightward and the Supply Curve

question 433

Multiple Choice

When the demand curve shifts rightward and the supply curve shifts leftward, then the equilibrium __________price and the equilibrium quantity __________.

• A) rises; decreases
• B) probably changes but the direction of the change cannot be determined; increases
• C) rises; probably changes but the direction of the change cannot be determined
• D) falls; increases

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Definitions:

Real Minimum Wage

The lowest legal hourly wage, adjusted for inflation, that employers can pay their workers.

Purchasing Power

The ability of an individual or group to buy goods and services with a given unit of currency or resources.

Real Wages

Wages adjusted for inflation, reflecting the actual purchasing power of income earned from work.

Two-Income Families

Households in which both partners earn wages or salaries contributing to the family's total income.