Question

QUESTION 13 If an economy is operating at a point below its production possibilities curve, then it is experiencing labor shortages trying to produce outside of its production capabilities focusing too much on housing and not enough on food production not using all of its available resources QUESTION 14 The law of demand is graphically illustrated by a(n) upward-sloping demand curve perfectly vertical demand curve perfectly vertical supply curve downward-sloping demand curve QUESTION 15 mmediately before Valentines Day, people in the Northeast were looking everywhere for red roses, but all the stores were sold out. From a purely economic point of view, the shortage existed because market equilibrium existed because there were no surpluses O greedy red rose sellers had been charging a price that was too high the market price must have been too low no red roses were being produced anywhere

Answer 1

Question 13

When an economy operates at a point that lies on its production possibilities curve then this indicates that it is using all its available resources in the effective manner.

In such respect, if the economy operates at any point that lies inside its production possibilities curve then this indicates that economy is not using all its resources in efficient manner or is not using all its available resources.

Hence, the correct answer is the option (4) [ Not using all its available resources].

Question 14

Law of demand indicates the inverse relationship between the price of a good and its quantity demanded keeping other factors affecting demand as constant.

When there exist an inverse relationship between two goods, curve depicting their relation always have a downward slope.

So,

The law of demand is graphically illustrated by the downward sloping demand curve.

Hence, the correct answer is the option (4) [Downward sloping demand curve].

Question 15

Shortage tends to exist when the quantity demanded exceeds the quantity supplied.

This generally happens when the given market price is below the equilibrium price.

So,

The shortage existed because the market price must have been too low.

Hence, the correct answer is the option (3) [The market price must have been too low].