Figure 3-8

question 140

Multiple Choice

Figure 3-8
-Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D₁ and S₁ (point A) . If there is an increase in the wages of motorcycle workers and an increase in the price of motorcycle insurance, a complement to motorcycles, the equilibrium could move to which point?

• A) A
• B) B
• C) C
• D) E

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Definitions:

Compounded Semi-annually

Interest calculation method where the interest is added to the principal amount after every six months, increasing the total amount on which future interest accruals are based.

Interest

Money paid at a particular rate for the use of money lent, or for delaying the repayment of a debt.

Equivalent Value

The amount that represents an equal worth or utility between two different items, currencies, or financial instruments, considering various factors.

Rate of Return

The percentage of profit or loss on an investment relative to its cost, indicative of its financial performance over a period.