Exam 1 written

Question 1

Production Possibilities Frontier.

a. ) Draw
b. ) Why…
c. ) Label 3 points
d. ) Growth

Answer 1

a. )
b. ) To more clearly illustrate and predict production.
c. )
d. ) Growth look like an outward curve

Question 2

Determinants of Demand for a product, and example.

Answer 2

Changes in consumer. ex: blue jeans are no longer popular.

Question 3

Determinants of supply, and example.

Answer 3

State of technology. ex: Humans are no longer needed to sew buttons because robots in the assembly line can do it cheaper and more efficiently.

Question 4

Explain what typically happens when a price (ceiling or floor) is implemented

Answer 4

Rent control in a city, a landlord can only charge as much as the city he live in will allow.

Question 5

Government intervenes in markets with a (price ceiling / floor) in an effort to help (producers / consumers)

Answer 5

floor / producers