The Figure Given Below Shows the Demand [D and D']

question 1

Multiple Choice

The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2

-When the price of a stock rises significantly higher than what can be justified by the dividends the firm can be expected to pay in the future, a(n) _____ is said to have occurred.

• A)stock market crash
• B)arbitrage
• C)stock market bubble
• D)bull run
• E)short sale

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Definitions:

Total Surplus

The sum of consumer and producer surplus, representing the total net benefit to society from the production and consumption of a good or service.

Deadweight Loss

A societal expense caused by disruptions in the marketplace, happening when there's a discrepancy between supply and demand levels.

Free-Trade Policy

A policy to eliminate import/export restrictions or tariffs among countries, facilitating a more free flow of goods and services across borders.

Exporting Steel

The process of producing steel in one country and selling it to buyers in another country.