Choose the letter of the diagram in Figure 3.1 that best describes the type of shift that would occur in each situation for the market listed on the left, ceteris paribus. Figure 3.1 Shifts of Supply and Demand Candy bars: People become more health-conscious and prefer vegetables instead of candy bars.

The social surplus in a market is $50. If another economic agent enters the market such that the marginal cost he incurs is $10 and the marginal benefit he receives from the trade is $5, then which of the following statements is true?

A) The social surplus will remain the same. B) The social surplus will increase by $5. C) The social surplus will decrease by $5. D) The social surplus will increase by $10.

Viceroy Vacations is deciding on how to price its vacation packages. Which of the following strategies would you suggest?

a. Price the flight, hotel and car separately b. Advertise it as an all-inclusive vacation c. Give them away as free vacations to everyone d. Close down your company. No one goes on vacations anymore