The Demand and Supply Curves in the Market for Gasoline

question 6

Multiple Choice

The demand and supply curves in the market for gasoline are illustrated in the graph. Starting at the equilibrium point, if the government then imposes a price ceiling of $10, consumer surplus will then be given by the area:

• A) A
• B) A + B
• C) A + D
• D) C

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Definitions:

T-Bills

Short-term debt securities issued by the U.S. government.

Cyclical Stock

Equities whose prices are affected by macroeconomic, systemic changes in the economy, often correlated with economic cycles of expansion and recession.

Boom Economy

A period of significant economic growth, high employment, and increasing wealth.

Recessionary Period

A time of economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.