Question

QUESTION 21 Assume there is a price floor imposed on a good which is above the equilibrium price. Which of the following changes would reduce the size of the surplus? a. An increase in demand. b. A decrease in demand. c. An increase in supply. d. Any of the above. QUESTION 22 Economic growth can be illustrated by: a. an inward shift of the production possibilities curve. b. a movement along the production possibilities curve. a movement from a point on the production possibilities curve to a point inside the production possibilities curve. d. an outward shift of the production possibilities curve.

Answer 1

21):- B is right option ​Assume there is a price ceiling imposed on a good which is below the equilibrium price. A decrease in demand changes would reduce the size of the shortage.

A price ceiling is a government-imposed limit on the price charged for a product. Governments intend price ceilings to protect consumers from conditions that could make necessary commodities unattainable. However, a price ceiling can cause problems if imposed for a long period without controlled rationing. Price ceilings can produce negative results when the correct solution would have been to increase supply. Misuse occurs when a government misdiagnoses a price as too high when the real problem is that the supply is too low. In an unregulated market economy price ceilings do not exist.

22) :- D is right option.

production possibilities curve is defined as a graph or economic model that shows the maximum combinations of goods and services, any two categories of goods, that can be produced from a fixed amount of resources.

24) :- A is right option. A legal institutions

Because all other available option are used as resources for society( in this option i am little confuse sorry if I am wrong)

25) :- C is right option, To an economist, a decrease in supply means a leftward shift in a supply curve

To an economist, a decrease in supply means that for any given price, the producer is now willing to produce and sell less. A decrease in supply is represented by a shift leftward of the whole curve.

26):-c is right option, ​If the government required car makers to install more costly and effective emission control devices on cars, it will lead to a higher price of cars and a smaller quantity of cars sold.

Due to addition of effective emissions control device price off car automatically increase and we know law of demand where quantity off good are inversely related to Price of good.

27) :- B is right option. microeconomics concentrates on the behaviour of individual consumers and firms while macroeconomics focuses on the performance of the entire economy.

Microeconomics is defined as the study of how households and firms make decisions and how they interact in markets.

Macroeconomics is defined as the study of economy wide phenomena, including inflation, unemployment and economic growth.