Assume There Are Three Hardware Stores, Each Willing to Sell

question 36

Multiple Choice

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot could offer a hammer for a minimum of $7. Lace Hardware could offer a hammer for a minimum of $10. Bob's Hardware could offer a hammer for a minimum of $13.If the market price of hammers increased from $9 to $13, producer surplus would:

• A) increase for each producer.
• B) increase only for House Depot.
• C) remain unchanged for Bob's Hardware.
• D) increase by $4 for Lace Hardware.

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Definitions:

Trickle-down Economics

An economic theory that advocates reducing taxes on businesses and the wealthy in society as a means to stimulate business investment in the short term and benefit society at large in the long term.

Dependency Theory

A theory in international relations and economic development positing that resources flow from a "periphery" of poor and underdeveloped states to a "core" of wealthy states, perpetuating neocolonial dependency.

Capitalist Economic System

An economic system based on private ownership of the means of production and where prices, production, and distribution of goods are determined by competition in a free market.

Social Arrangements

The structured ways in which society is organized, including institutions, hierarchies, and social relationships.