(a) With aid of production possibility frontier, explain the concepts of scarcity, choice and opp

Managerial Economics: A Problem Solving Approach
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ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter8: Understanding Markets And Industry Changes
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QUESTION 1

(a) With aid of production possibility frontier, explain the concepts of scarcity, choice and opportunity cost.                                                                                                                               

(b) Give an example of a price ceiling and an example of a price floor. Which causes a shortage of a good—a price ceiling or a price floor? Justify your answer with a graph.

                                                                                                                            

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