Assume There Are Three Hardware Stores,each Willing to Sell One

question 85

Multiple Choice

Assume there are three hardware stores,each willing to sell one standard model hammer in a given time period.House Depot can offer their hammer for a minimum of $7.Lace Hardware can offer the hammer for a minimum of $10.Bob's Hardware store can offer the hammer at a minimum price of $13. Given the scenario described,if the market price of hammers decreased from $13 to $11:

• A) total producer surplus would decrease from $9 to $5.
• B) total producer surplus would increase from $5 to $9.
• C) total producer surplus would decrease from $30 to $17.
• D) total producer surplus would remain unchanged.

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Definitions:

Common Sense

Sound practical judgment concerning everyday matters, or a basic ability to perceive, understand, and judge in a manner that is shared by (common to) nearly all people.

Tradition

The transmission of customs or beliefs from generation to generation, or the fact of being passed on in this way.

Status Quo

The existing state of affairs, especially regarding social or political issues.

No Collar

Describes workers in industries characterized by creative or knowledge-based jobs, as opposed to traditional blue-collar or white-collar sectors.