The Following Table Shows the Aggregate Demand and Aggregate Supply

question 101

Multiple Choice

The following table shows the aggregate demand and aggregate supply schedule for a hypothetical economy. Refer to the above table.If the quantity of real domestic output demanded decreased by $500 and the quantity of real domestic output supplied increased by $500 at each price level, the new equilibrium price level and quantity of real domestic output would be:

• A)150 and $1500.
• B)150 and $2000.
• C)200 and $2000.
• D)250 and $2000.

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Definitions:

Income Elasticity

A measure of how much the demand for a product changes with a change in consumers' income.

Income Elasticity

A measure of how much the quantity demanded of a good responds to a change in consumers' income.

Inferior Good

A type of good whose demand decreases when consumer income rises, unlike normal goods for which the opposite is true.

Marginal Utility

The additional satisfaction or utility gained by consuming an additional unit of a good or service.