Question

8. Three variables are related and two of them are plotted on a two-dimensional graph. If the third variable that is not measured on either the x-axis or the y-axis changes, we would expect: a. a movement along the drawn curve b. a shift of the curve c. no impact on the curve because the third variable is not measured on either of the axes d. both a movement and a shift of the curve 9. The law of increasing opportunity costs exists because a. the value of the dollar has diminished b. resources are not equally efficient in producing various goods c. wage rates invariably rise as the economy approaches full employment d. consumers tend to value any good more highly when they have little of it e. resources are scarce

Answer 1

8) (c) no impact on the curve because the third variable is not measured on either of the axis (as in the question it is not mentioned whether it is a linear varying function or polynomial function, so let assume the case of linear )

No change in x andy axis

9) (e) resources are scarce (let us take the case of bowed out curve for production of two products pizza and car, as the production of one good increases from 0 to its maximum amount the opportunity cost for another good which must be given up increase as the resources are not perfectly substituted for both goods   )

12) (d) the figure has a negative and decreasing slope (as when x increases, y decreases and also m<0)

13) (c) prices (free market force which is also known as the invisible hand states that when there are no restrictions or regulations by the government then the customer will buy from the seller whose competitive price is low in respect to other thus the seller get the price at the end and buyer will get good at price which he/she desired)

14)(a) purchase resources in the factor market (circular flow model depicts how the money moves in the economy in which the household sector engages in consumption spending)

17) (b) an automobile plant (factory building) used by General Motors ( Physical capital is one of the four main factors of production and it consists of tangible goods which are man-made that are use to produce goods)