Exhibit 3-4 -Refer to Exhibit 3-4. If S₂ and D₂ Are the D₂

question 24

Multiple Choice

Exhibit 3-4
-Refer to Exhibit 3-4. If S₂ and D₂ are the original supply and demand curves and, ceteris paribus, supply shifts to S₁,

• A)the quantity demanded decreases from Q₄ to Q₂.
• B)supply decreases.
• C)the quantity demanded increases from Q₂ to Q₄.
• D)the quantity supplied increases from Q₃ to Q₄.
• E)the equilibrium price falls from P₂ to P₁.

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Definitions:

Rate Of Trade-off

The rate at which one good or service must be sacrificed to produce an additional unit of another good or service, often related to the concept of opportunity cost.

Chairs

Furniture pieces designed for sitting, typically consisting of a seat, back, legs, and sometimes arm supports.

Couches

Furniture pieces designed for seating multiple people, characterized by a long seating area with back and arm support.

Pies Per Day

A measurement of production output, often used metaphorically to represent the daily productivity or output level of a particular good.