Graph 7-2 -Refer to Graph 7-2. When the Price Rises from P₁

question 108

Multiple Choice

Graph 7-2

-Refer to Graph 7-2. When the price rises from P₁ to P₂, which of the following is NOT true?

• A) the buyers who still buy the good are worse off because they now pay more
• B) some buyers leave the market because they are not willing to buy the good at the higher price
• C) the total value of what is now purchased by buyers is actually higher
• D) consumer surplus in the market falls

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Definitions:

Decision

The act of making a choice among available alternatives.

Experiential System

A processing mechanism in the brain that is intuitive, automatic, and based on experiences, as opposed to analytical reasoning.

Cognitive System

encompasses the mental processes involved in perception, memory, judgment, and reasoning.

Mode of Thinking

The particular way or method in which thoughts are organized and processed.