400 Cars 300 (millions per year) 200 100 0 100 200 300 400 Grain (millions of to
ID: 1124188 • Letter: 4
Question
400 Cars 300 (millions per year) 200 100 0 100 200 300 400 Grain (millions of tons per year) 14. For the economy shown above to operate at point C, it must Be willing to lower the price of grain b. a. Use its given resources more efficiently than it would at point A c. Experience resource unemployment d. Experience an increase in its resource and/or an improvement in its technology 15. The law of demand states that a. As the price of a good rises, more units are demanded b. There is a direct relationship between the price of the gpod produced c There is a negative relationship between the price of a good and the quantity of the good demanded d There is an increase in the need for a good as the price of the good increases 16. In the free marketplace . Surpluses and shortages can both persist and never be eliminated b. c. d. Surpluses can last for a long time, but shortages disappear relatively quickly Shortages can last for a long time, but surpluses disappear relatively quickly Neither surpluses nor shortages can persist 17. If supply increases and demand decreases, then the equilibrium a. Price will definitely fall b. Price will definitely rise Quantity will definitely fall d. c. Quantity will definitely rise 18. A price ceiling means that price is a. Not allowed to fall b. Not allowed to change in either direction c. At equilibrium d. Not alowed to rise 19. The purpose of a price floor is to a. Help consumers b. help producers c fight inflation d. cause inflation 20. Gross domestic product measures the value of output a. At fair value" b. At depreciated value c. At market value d. arbitrarilyExplanation / Answer
14.
A Production possibility curve (PPF) gives the different combination of output that a country can produce using all of its resources efficiently. Any point on the production possibility curve represents the efficient allocation of resources. The slope of the PPF gives the opportunity cost of producing one good relative to other. The PPF has a negative slope because as the production of one good increase, we have to give up the production of another due to limited resources.
If a point lies beyond PPF, the economy can not acieve the point unless it has increased resources and technology so that the PPF shifts toward the point and at least toches the point. Therefore, the correct option is
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15.
The demand for good is an inverse relationship between price and quantity. The graphical relationship between price and quantity demanded is depicted by the demand curve. Any point on the demand curve shows the quantity consumer demands for any particular price.
Therefore, the correct option is
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16.
The equilibrium is the point at which the quantity demanded by the consumer equals the quantity supplied by the producers at a particular price. It is the point of intersection between demand and supply curve. In free marketplace the price acts a auctioneer and in a free market the demand will be always equal to supply. Thuus there will be no shortages or surplus.
The correct option is
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17.
The equilibrium is the point at which the quantity demanded by the consumer equals the quantity supplied by the producers at a particular price. It is the point of intersection between demand and supply curve.
If the demand increases, the equilibrium quantity increases along the supply curve, that is the equilibrium price and quantity both increases. If the supply increases, the equilibrium quantity increases along the demand curve, that is the equilibrium price falls and quantity increases.
Therefore, at new equilibrium quantity increases for sure and the effect on price depends on the relative strength of demand and supply shift.
Therefore, the correct option is
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18.
The price control is restrictions on prices by government to maintain affordability of essential product, to combat inflation or to ensure a minimum income for the producers and suppliers of the good. The price controls can be of two types, price floor and price ceiling. The price celling is restricting price below equilibrium price to ensure the affordability of the good. Price floor is restricting price above equilibrium price to ensure minimum income for the producers and suppliers of the good.
Therefore, the correct option is
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19.
The price control is restrictions on prices by government to maintain affordability of essential product, to combat inflation or to ensure a minimum income for the producers and suppliers of the good. The price controls can be of two types, price floor and price ceiling. The price celling is restricting price below equilibrium price to ensure the affordability of the good. Price floor is restricting price above equilibrium price to ensure minimum income for the producers and suppliers of the good.
Therefore, the correct option is
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20
The aim of national income is to obtain a measure of total quantity of goods and services produced for the market in a given country over a given period of time. To measure the aggregate economic activity we are interested in gross domestic product or GDP. GDP is the dollar value of final output produced during a given period of time within the borders of United States.
Therefore, the correct option is
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