Along a Given Demand Curve, an Increase in the Price

question 31

Multiple Choice

Along a given demand curve, an increase in the price of a good will:

• A)increase consumer surplus.
• B)decrease consumer surplus.
• C)have no effect on consumer surplus.
• D)decrease producer surplus.

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Definitions:

Adverse Supply Shock

A situation where the supply of goods decreases suddenly, leading to higher prices and lower quantities available.

Short-Run Aggregate-Supply Curve

Depicts the relationship between the price level and the quantity of goods and services that firms are willing to produce, taking some inputs as fixed.

Short-Run Phillips Curve

A graphical representation that shows the inverse relationship between short-term inflation and unemployment rates, suggesting a trade-off.

Inflation Rate

The percentage increase in the general level of prices for goods and services in an economy over a period of time, often measured annually.