Refer to the Provided Graph

question 228

Multiple Choice

Refer to the provided graph. Suppose consumers do not know the safety risks associated with a particular good and that the free-market equilibrium is at E, as shown in the diagram above. If an independent agency now provides accurate information to consumers about the harmful characteristics of the product, then

• A)the supply curve will shift to the left.
• B)the supply curve will shift to the right.
• C)both the new equilibrium price and quantity will be lower.
• D)the new equilibrium price will be higher but the equilibrium quantity will be either higher or lower.

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Definitions:

Biological Sex

The physical characteristics, such as chromosomes, hormone levels, and reproductive/sexual anatomy, that classify an individual as male or female.

Observational Learning

A learning process through which individuals acquire new behaviors, skills, or attitudes by watching others, also known as social learning.

Novel Gestures

New or unique movements used to communicate intentions, emotions, or information.

Correlational Studies

Research methods that examine the relationship between two or more variables without manipulating them, to determine if a statistical relationship exists.