Answered: 1. Which of the following will result…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Transcribed Image Text:1. Which of the following will result in an uncertainty regarding any change that might occur in the equilibrium quantity but a definite increase in the equilibrium price? a) An increase in demand and a decrease in supply b) A decrease in demand and a decrease in supply c) A decrease in demand and an increase in supply d) An increase in demand and an increase in supply 2. In a production possibility frontier (PPF) graph it is observed that points 1,2,3, and 4 lie on the PPF, Point 5 is outside the PPF, and point 6 is inside the PPF. Which of the following statements is correct? a) Point 6 can be produced only if there is an increase in resource availability and/or an improvement in technology. b) Points 1-4 and 6 can be produced with the currently available resources and technology, but resources are used efficiently only at points 1-4. c) Point 5 can be produced with the currently available resources and technology, but the resource use is inefficient. d) Point 6 can be produced with the currently available resources and technology and the resource use is efficient. 3. Assume there is a simultaneous decrease in the number of consumers, a decrease in income, and an expectation by consumers of a lower price. Which of the following statements is correct? a) The equilibrium price will increase, and the equilibrium quantity will decrease b) The equilibrium price will decrease, and the equilibrium quantity will increase c) The equilibrium price will increase, and the equilibrium quantity will increase d) The equilibrium price will decrease, and the equilibrium quantity will decrease 4. Chevron and Shell are two competing companies that sell gasoline. If the price of the Shell brand of gasoline increases. This will cause a (n) _______ in the for the Chevron brand. a) Increase, demand b) Decrease, demand c) Decrease, tity demanded d) Increased, quantity demanded

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