The current market price for good X is below the equilibrium ...

[FButt]

The current market price for good X is below the equilibrium price, and then the demand curve for X shifts rightward. What is the likely outcome of the demand shift?
 
  A) The surplus increases.
  B) The surplus decreases.
  C) The shortage increases.
  D) The shortage decreases.

Question 2

The substitution effect of a decrease in the wage will
 
  A) decrease leisure, regardless of whether leisure is a normal or inferior good.
  B) increase leisure, regardless of whether leisure is a normal or inferior good.
  C) increase leisure only if leisure is a normal good.
  D) decrease leisure only if leisure is a normal good.

[frogdreck123456]

Answer to Question 1

C

Answer to Question 2

B