Question

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Question 41 0.4 pts The market for footballs is perfectly competitive. If all else is held constant and the price of leather decreases, we would expect that the equilibrium quantity of footballs wouldand the equilibrium price would O fall; remain constant O rise; rise fall; fall O rise; fall fall; rise Question 42 0.4 pts Taxes cause the equilibrium price of a good to remain the same. increase. go down only for consumers decrease. go up only for producers.

Answer 1

41) fall; rise

Decrease in the price of leather decreases the cost of production of football. As a result, supply of football increases which shifts supply curve rightwards causing increase in equilibrium quantity and decrease in equilibrium price.

42) Increase

Imposition of tax by the government increases the price paid by the consumer and decreases the price received by the seller.

43) 20 solved crimes

1 Wooden boats = 20 crimes solved

Opportunity cost is the value of next best alternative foregone. To produce 1 wooden boat, producer has to give up 20 solved crimes. So, opportunity cost of 1 wooden boat is 20 solved crimes.

44) The price of a substitute of this good increased.

Substitute goods are those goods which used in the place of each other. Increase in the price of one good increases the demand of other good and shifts demand curve rightwards.

45) Yes, increased production of capital goods means fewer consumer goods today.

Resources are limited, so production of capital goods decreases the production of consumer goods which shows opportunity cost.