Refer to the Information Provided in Figure 3

question 32

Multiple Choice

Refer to the information provided in Figure 3.7 below to answer the following questions. Figure 3.7
-Refer to Figure 3.7. Assume the market is initially at Point B and that pizza is a normal good. A decrease in income would cause the market to move from Point B on demand curve D2 to

• A) demand curve D1.
• B) demand curve D3.
• C) Point A on demand curve D2.
• D) Point C on demand curve D2.

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Definitions:

Opportunity Costs

The cost of forgoing the next best alternative when making a decision, representing the benefits one misses out on.

Perfectly Competitive

A market structure characterized by many buyers and sellers, all of whom are price takers with the product being homogeneous.

Sunk Costs

Expenses that have already been incurred and cannot be recovered, which should not influence future business decisions.

Dairy Farmer

A dairy farmer is an individual engaged in the management and care of cows for the production of milk and other dairy products.