Which of the following correctly identifies a Malthusian cycle?
A) Increase in GDP would increase GDP per capita above subsistence, which will cause an increase in the size of population which would increase pressure on resources and eventually reduce GDP per capita.
B) Increase in GDP would increase GDP per capita above subsistence, which will cause a decrease in the size of population that would reduce pressure on resources and increase GDP per capita further.
C) Decrease in GDP would decrease GDP per capita below subsistence, which will cause an increase in the size of population which would increase pressure on resources and eventually reduce GDP per capita.
D) Increase in GDP would increase GDP per capita above subsistence, which will cause an increase in the size of population that would increase pressure on resources and that would further increase GDP per capita.
Question 2
Assume that the supply curve for a commodity shifts to the left and the demand curve shifts to the right, both by the same degree. Then, in comparison to the initial equilibrium, the new equilibrium will be characterized by:
A) a lower price and the same quantity. B) the same price and quantity.
C) a lower price and quantity. D) a higher price and the same quantity.
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