Assume the Market Is in Equilibrium in the Graph Shown

question 7

Multiple Choice

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

• A) Producer surplus would increase, and total surplus would increase.
• B) Producer surplus would decrease, and total surplus would increase.
• C) Producer surplus would increase, and total surplus would decrease.
• D) Producer surplus would decrease, and total surplus would decrease.

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Definitions:

Stanford Prison Study

A psychological experiment conducted in 1971 by Philip Zimbardo to investigate the effects of perceived power, focusing on the struggle between prisoners and prison officers.

Natural Violence

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Social Hierarchy

A ranking system within societies or groups where individuals or groups are classified on the basis of esteem and prestige acquired mainly through economic success and accumulation of wealth.

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Expected standards of conduct, which influence behavior.