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Question
5. Draw a production possibilities frontier (PPF) for good A and good B. Suppose that these goods are subject to increasing relative costs in production, and be sure that your graph reflects this fact.
Now suppose that a new and innovative technology enhances the production of good A but not good B. Illustrate how this new innovation changes the production possibilities frontier (PPF).
Answer
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Related questions
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When the price elasticity of demand is elastic, a consumer is
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b. relatively unresponsive to a change in price.
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e. completely responsive to a change in price.
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b. 100 percent.
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e. unknown because not enough information is provided.
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Price gouging laws will usually result in ________ the product in the distressed market.
a. more supply of
b. more local business start-ups to supply
c. government setting up an agency to regulate supply of
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Q:
The economic entity most likely to engage in price gouging is
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Q:
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b. society faces a trade-off between homelessness and rent control.
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Q:
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Q:
What will an individual do differently as a buyer in the black market in the long run?
a. He or she will substitute away from the product.
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Q:
What is the long-run consequence of a price ceiling law?
a. A surplus will continue to exist and will grow larger over time.
b. A surplus will continue to exist and will grow smaller over time.
c. A shortage will continue to exist and will grow larger over time.
d. A shortage will continue to exist and will grow smaller over time.
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Q:
Suppose Solomon lives in a community with no price controls. What do you expect will happen if his town borders a community where there is a binding price ceiling on most products?
a. Prices in the legal market in the community with a binding price ceiling will rise.
b. Prices in the legal market in the community with a binding price ceiling will fall.
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Q:
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Q:
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Suppose Kate lives in a community with no price controls. What could she expect will happen if her town borders a community where there is a nonbinding price ceiling on most products?
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Q:
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Q:
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Q:
Taxing goods with very inelastic supply generates less deadweight loss than taxing goods with very elastic supply because
a. producers have to pay these taxes out of pocket.
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Q:
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A(n) ________ in the elasticity of supply or demand in a market for a good that is taxed would tend to ________ who is legally responsible for paying the tax.a. decrease; broaden b. decrease; have no effect on c. increase; broadend. increase; narrowe. increase; have no effect on
Q:
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a. Demand for jelly will increase along with the price.
b. Demand for jelly will decrease along with the price.
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d. Both the supply and demand for jelly will increase along with the price.
e. The supply of jelly will decrease and the price will increase.
Q:
A tax on milk would likely cause a decrease in the price ofa. ice cream. b. cheese. c. soymilk.d. nondairy creamer.e. breakfast cereal.
Q:
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Q:
The deadweight loss from a tax is likely to be less with a good that hasa. few complements. b. many substitutes. c. few substitutes.d. an elastic demand.e. an elastic supply.