Suppose a technological advancement makes automobiles 50% safer, and at the same
ID: 1124286 • Letter: S
Question
Suppose a technological advancement makes automobiles 50% safer, and at the same time, the prices of automobiles go up by 25%. No other prices in the economy changed. Did the relative price of automobiles rise or fall?
It depends on whether the safety improvements raise the cost of producing automobiles by more than, less than, or exactly 25%.
The relative price of automobiles rose because the price went up by 25% when other prices did not rise.
The relative price of automobiles fell because the price increased by 25% but the safety increased by 50%.
It depends on whether consumers demand safer cars.
The old-age dependency ratio is found by
dividing the number of people of working age by the number of retirees.
dividing the number of older people by the number of people in the entire population.
multiplying the number of older people by the percentage in that group who have no retirement savings.
dividing the number of older people by the number of people of working age.
Explanation / Answer
1)
it depends on whether the safety improvements raise the cost of producing automobiles by more than, less than, or exactly 25%
the above is answer
2)
dividing the number of older people by the number of people of working age.
the above is answer
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