ECON

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A production possibilities frontier (PPF) is a curve showing the maximum attainable combinations of two products that may be produced with available resources and current technology. At which point is the country’s future growth rate likely to be the highest? Briefly explain why. Point W (top) because it is where the most resources are used to produce capital goods. What happens if a country produces a combination of goods that efficiently uses all of the resources available in the economy? The country is operating on it production possibilities frontier. What does increasing marginal opportunity costs mean? Increasing the production of a good requires larger and larger decreases in the production of another good. What are the…show more content…
Do you agree with Posner’s statement, as given by the reporter? No, the accurate phrasing would be that ‘’a reduce prize drives up the quantity demanded.” If the market price ‘Pmkt’ is above the price ‘Po’, then quantity supplied is greater than quantity demanded and the market is in surplus. When there is shortage of good … consumers compete against one another by bidding the price upward. If the market price ‘Pmkt’ is below the price ‘Po’, then quantity supplied is less than quantity demanded and the market is in shortage. When there is shortage of a good, consumers compete against one another by bidding the price upward. The demand for pears is highest during summer and lowest during winter. Yet pear prices are normally lower in summer than in winter. What must be happening to the supple of pears, from winter to summer, for the equilibrium price to fall? The supply increases more than the demand increases. A student makes the following argument: “When a market is in equilibrium, there is no consumer surplus. We know this because in equilibrium, the market price is equal to the price consumers are willing to pay for the good.” The student is incorrect because the price consumers are willing to pay and the market price are only equal for the last unit consumed. Briefly explain whether you agree with the following statement: “If at the current quantity marginal benefit

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