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Questions and Answers
What happens to price when demand increases and supply decreases?
What happens to price when demand increases and supply decreases?
- Fluctuates
- Rises (correct)
- Falls
- Remains constant
If a technological advancement leads to increased production of a good, what is likely to happen?
If a technological advancement leads to increased production of a good, what is likely to happen?
- Demand increases, price increases
- Demand decreases, price decreases
- Supply increases, price decreases (correct)
- Supply decreases, price increases
What effect does an increase in consumer income have on demand for normal goods?
What effect does an increase in consumer income have on demand for normal goods?
- Increases demand (correct)
- No effect on demand
- Decreases demand
- Increases supply
What does the production possibilities curve illustrate?
What does the production possibilities curve illustrate?
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How does an increase in the production of one good affect the production of another on the production possibilities curve?
How does an increase in the production of one good affect the production of another on the production possibilities curve?
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What does a point inside the production possibilities curve indicate?
What does a point inside the production possibilities curve indicate?
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