Table 7-16 -Refer to Table 7-16. Both the Demand Curve and the Curve

question 55

Multiple Choice

Table 7-16
-Refer to Table 7-16. Both the demand curve and the supply curve are straight lines. If 6 units are bought and sold, then total surplus is

• A)$18 lower than it would be if the equilibrium number of units were bought and sold.
• B)$22 lower than it would be if the equilibrium number of units were bought and sold.
• C)$26 lower than it would be if the equilibrium number of units were bought and sold.
• D)$6 higher than it would be if the equilibrium number of units were bought and sold.

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Definitions:

Purchasing-Power Parity

An economic principle positing that currency exchange rates reach equilibrium when the purchasing power in both countries involved is equal.

Depreciated

The decrease in value of an asset over time, often due to wear and tear or obsolescence.

Appreciated

A term often used in finance and economics to describe an increase in the value of an asset or currency.

Export

Items or services transported from one nation to another with the intent of being sold or traded.