Use the Following to Answer Question

question 51

Multiple Choice

Use the following to answer question:
Figure 3.3
-(Figure 3.3) The decrease in supply from S₁ to S₂ will cause consumer surplus to _____ and producer surplus to _____.

• A) decrease by $10.50; decrease by $4.50
• B) decrease by $5.50; increase by $3
• C) increase by $6; decrease by $18
• D) increase by $8.75; increase by $6.67

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Definitions:

Capital Inputs

The physical assets, financial resources, and human capital used in the production of goods and services.

Optimal Use

The most efficient, effective, or desirable utilization of resources or goods to achieve the best outcome or return.

Interest Rate

The percentage of a loan charged as cost to the borrower for the use of the money.

Capital Projects

Long-term investments made by companies or governments to create, improve, or maintain physical assets.