Suppose That the Slope of the AE Curve Is 0

question 260

Multiple Choice

Suppose that the slope of the AE curve is 0.67. Then a $100 decrease in autonomous spending means equilibrium expenditure will

• A) increase by $200.
• B) decrease by $300.
• C) decrease by $200.
• D) increase by $300.

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Definitions:

Producer Surplus

Producer surplus is the difference between the amount producers are willing to sell a good for and the higher actual price at which they sell the good.

Consumer Surplus

The difference in the total value consumers are prepared to pay for a product or service compared to their actual payments.

Spanish Producers

Are businesses or individuals in Spain engaged in the creation or manufacturing of goods and services.

Spanish Consumers

Individuals or households in Spain that purchase goods and services for personal use.