ID: C 8. f production involves constant opportunity cost, the production possibi
ID: 1140965 • Letter: I
Question
ID: C 8. f production involves constant opportunity cost, the production possibilities curve a. is "bowed inward." b. is a straight line. c. is "bowed outward." d. is a wavy line e. has an unpredictable shape. 9. In January, 2,500 quarts of ice cream are sold in Boston at $2 a quart. In February, 3,000 quarts are sold at $2.50 a quart. This change in quantity sold and price may have been caused by a. a reduction in wages in the Boston area. b. the introduction of labor-saving automated ice cream-packing machinery the release of a medical study showing that ice cream consumption improves mental c. health. d. the decision by Boston ice cream sellers to eliminate discount C10. A ticket to an Eric Clapton concert costs $45. If you have a ticket, you can "scalp" it (sell it illegally) for $75. To a ticket holder who bought the scalped ticket, the opportunity cost of actually attending the concert is what you could do with a. $A5. b. $50 . $75. d. $115 11. The U.S. government banned cigarette advertising on radio and television after January, 1971. You would expect to find that after the ban took effect the equilibrium price of cigarettes a. no change b. rose c. fell d. none of the above 12. U.S. steel workers constantly lobby for curbs on the volume of imported steel. This would produce a a. rightward shift in the supply curve of American steel. b. rightward shift in the demand curve of American steel. c. leftward shift in the demand curve of American steel. d. leftward shift in the supply curve of American steel. For a given production possibilities frontier, which points are attainable? 13. points inside the frontier a. b. points outside the frontier c. points on or outside the frontier d. points on the frontier only points on or inside the frontier Along a supply curve, a. supply changes as price changes. b. quantity supplied changes as price changes c. supply changes as technology changes. d. quantity supplied changes as technology changes e. 14.Explanation / Answer
First four are answered below-
8) b is correct
Slope of production possibility Frontier is the opportunity cost and when opportunity cost is constant production possibility Frontier is a straight line.
9) c is correct
Price and quantity increase together when there is an increase in demand. Health report issued increases the demand for icecream and results in higher quantity of ice cream sold at higher price.
10) c is correct
Opportunity cost is the next best alternative. If the consumer does not go to the concert he can earn 75 which is the opportunity cost of going to the concert.
11) c is correct
Ban on advertisement of cigarettes leads to decrease in demand which results in decrease in equilibrium price of cigarettes.