When the Price of a Good Increases and All Else

question 96

Multiple Choice

When the price of a good increases and all else is held constant

• A) both consumer surplus and producer surplus decrease.
• B) both consumer surplus and producer surplus increase.
• C) consumer surplus decreases.
• D) producer surplus decreases.
• E) producer surplus increases.

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Definitions:

Active Ingredient

The component of a product that is responsible for its effects or therapeutic benefits.

Marijuana

A psychoactive drug from the Cannabis plant, used for medical or recreational purposes.

THC

The main psychoactive compound in cannabis that causes the high sensation, known scientifically as delta-9-tetrahydrocannabinol.

Methamphetamine

A powerful, highly addictive stimulant that affects the central nervous system, known for its use as a recreational drug that can lead to harmful physical and psychological effects.