Question

1.

A production possibilities frontier will have a curved or “bowed out” shape if:
	opportunity costs are increasing. resources are scarce. the economy is growing. opportunity costs are declining.

2.

	(Figure: Graph Interpretation) In the graph, _____ is the dependent variable and the slope of the line is _____. о 150 300
	R; positive S; positive S; negative R; negative

3.

	If a price floor is set below the market price, it is:
	ineffective. effective. efficient. inefficient

4.

Total surplus is calculated as:
	producer surplus plus deadweight loss. producer surplus plus consumer surplus. consumer surplus plus deadweight loss. consumer surplus plus market efficiency.

Answer 1

Answer

1.
The correct answer is "option 1"
opportunity costs are increasing.
A production possibilities frontier will have a curved or bowed out shape if opportunity costs are increasing. This is due to the law of increasing opportunity costs.

2.
The correct answer is "option 3"
S; negative
In the given graph R is the independent variable and S is the dependent variable. Since the line is sloping downwards it has a negative slope.

3.
The correct answer is "option 1"
ineffective
If a price floor is set below the market price it is ineffective. A price floor sets the minimum price that should be received for the commodity. If it is set below the equilibrium price then it will be ineffective.

4.
The correct answer is "option 2"
producer surplus plus consumer surplus

Total surplus=consumer surplus+ producer surplus
Total surplus is calculated as the total addition of the consumer surplus and producer surplus.