In order for a production possibilities curve to shift to the right, which of the following must occur?
A) government involvement
B) increasing consumer wants
C) economic growth
D) reductions in the supply of resources
Ans: C) Economic growth
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Refer to the scenario above. If the government enforces a ban on Firm B, and asks Firm A to carry out all the production:
A) Firm A's marginal cost is likely to decrease, but its average cost is likely to increase. B) Firm A's marginal cost and average cost are likely to decrease. C) Firm A's marginal cost is likely to increase, but its average cost is likely to decrease. D) Firm A's marginal cost and average cost are likely to increase.
If a good has a negative income elasticity of demand, this indicates that the good is
A) normal. B) a substitute with another good. C) inferior. D) a complement with another good.