Refer to the Below Supply and Demand Graph

question 60

Multiple Choice

Refer to the below supply and demand graph.Point A represents the current equilibrium level of output of this product and point B represents the optimal level of output from society's perspective.If government decides to correct this externality with a subsidy to consumers,then the:

• A) demand curve will shift from D₂ to D₁.
• B) supply curve will shift from S₁ to S₂.
• C) demand curve will shift from D₁ to D₂.
• D) supply curve will shift from S₂ to S₁.

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Definitions:

Endoderm

The innermost layer of cells or tissue of an embryo in early development that gives rise to the lining of the digestive and respiratory systems.

Circulatory System

The circulatory system is an organ system that permits blood and lymph circulation to transport nutrients, oxygen, carbon dioxide, hormones, and blood cells to and from cells in the body.

Mesoderm

The intermediate layer in an embryo during its initial stages of development, responsible for forming the muscular, skeletal, and circulatory systems.

Somites

Blocks of mesoderm that are located on either side of the spine in the developing embryo, which will differentiate into the vertebrae, ribs, muscles, and dermis.