Figure 9-16

question 2

Multiple Choice

Figure 9-16.The figure below illustrates a tariff.On the graph,Q represents quantity and P represents price.
-Refer to Figure 9-16.The tariff

• A)decreases producer surplus by the area C,decreases consumer surplus by the area C + D + E,and decreases total surplus by the area D + F.
• B)increases producer surplus by the area C,decreases consumer surplus by the area C + D + E + F,and decreases total surplus by the area D + F.
• C)creates government revenue represented by the area B + E and decreases total surplus by the area D + E + F.
• D)increases producer surplus by the area C + G and creates government revenue represented by the area D + E + F.

Understand the concept of opportunity cost in decision making.

Differentiate between different types of costs (fixed, variable, relevant, sunk) and their relevance to decision-making.

Understand the concepts and mechanics of interest rate swaps as tools for managing financial risk.

Recognize different derivative instruments and their basic usage in financial markets.

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Definitions:

Group Polarization

describes the phenomenon where discussions within a group lead to an amplification of the group’s initial attitude, making their final stance more extreme.

Overconfidence Bias

A cognitive bias where an individual's subjective confidence in their judgments is greater than their objective accuracy, leading to overly optimistic assessments and decision-making errors.

Majority Viewpoint

refers to the opinion or belief held by the greater number of individuals within a group or society.

Team Members

Individuals who are part of a team, collaborating and contributing towards achieving common goals or tasks.