Assume the Market Is in Equilibrium in the Graph Shown

question 108

Multiple Choice

Assume the market is in equilibrium in the graph shown at demand D and supply S1 (at a quantity of 5) . If the supply curve shifts to S2, and a new equilibrium is reached (at a quantity of 7) , which of the following is true?

• A) Total surplus increases by $12.50.
• B) Total surplus decreases by $12.50.
• C) Total surplus increases by $15.50.
• D) Total surplus decreases by $15.50.

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Definitions:

Deception

The act of misleading or falsely persuading others, often involving concealing the truth or providing incorrect information.

Random Assignment

A method used in experiments where participants are allocated to different groups in a way that every participant has an equal chance of being assigned to any group, ensuring variation across them.

Internal Validity

The extent to which the design and conduct of a study allow for the accurate determination of a causal relationship between variables, free from confounding factors.

Extraneous Variables

Any variable other than the independent variable that may affect the outcome of an experiment and should be controlled or accounted for.