If There Is a Decrease in Supply (Parallel Shift of Demand

question 29

Multiple Choice

If there is a decrease in supply (parallel shift of demand to the right) ,assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus:

• A)will increase.
• B)will decrease.
• C)will remain the same.
• D)may change,but we can't tell how.

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Definitions:

Price Capital

The cost of acquiring assets used for production, such as machinery or buildings, often referred to as investment in capital goods.

Employment Decline

A reduction in the number of employed individuals within a specific job market, sector, or economy over a certain period.

Occupations

Various types of jobs or professions in which individuals engage to earn a living.

Economic Principle

A widely accepted generalization about the economic behavior of individuals or institutions.