Use the Following to Answer Questions 35-36

question 103

Multiple Choice

Use the following to answer questions 35-36:
Figure 3.12
-(Figure 3.12) The quota causes consumer surplus to:

• A) decrease from $12 to $2.
• B) decrease from $16 to $2.
• C) increase from $2 to $12.
• D) increase from $8 to $10.

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Definitions:

Market Portfolio

A theoretical portfolio of investments that contains all available assets in the market, weighted by market capitalization.

Call Option

The right to buy an asset at a specified exercise price on or before a specified expiration date.

Nonsystematic Variance

The portion of an investment's variance that is attributable to factors specific to its issuer and can be eliminated through diversification.

Market Index

A statistical measure reflecting the composite value of a selection of stocks, representing a specific market or a portion of it, used as a benchmark.