-The Above Figure Shows the Demand Curve for Crude Oil

question 4

Multiple Choice

-The above figure shows the demand curve for crude oil.Suppose the price is currently $15.A supply shock suddenly raises the price to $17.What happens with the crude oil sales revenue?

• A) Crude oil sales revenue stays the same.
• B) Crude oil sales revenue increases by less than $250.
• C) Crude oil sales revenue declines by more than $300.
• D) Crude oil sales revenue declines by less than $300.

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Definitions:

Disposable Income

The liquidity pool available for households to channel into saving and spending after income tax deductions.

Induced Consumption

The part of consumer spending that increases when disposable income rises and decreases when disposable income falls.

Disposable Income

The amount of money left for spending and saving after income taxes have been deducted.

Autonomous Consumption

The level of consumption that does not change with fluctuation in income; it is the consumption level when income is zero.