Question

7a)Which of the following will occur if there is an increase in the wages of workers in the pork industry?

An increase in the supply of pork

An increase in the demand for pork

A decrease in the demand for pork

A decrease in the supply of pork

b)For two goods, chicken and tomatoes, producers have a comparative advantage in one good or the other. As the output of chicken expands, producers with a _______ comparative advantage in tomatoes will switch from tomatoes, and the opportunity cost of chicken will ______.

esser; decrease

greater; increase

lesser; increase

greater; decrease

c)If the production possibilities frontier shifts outward, which of the following is not affected?

Tastes

Supply

Efficiency

Output

d)If cheese, an ingredient in cheeseburgers, increases in price, what would we expect?

The demand curve for hamburgers to shift to the right

The supply curve for hamburgers to shift to the right

The supply curve for hamburgers to shift to the left

The demand curve for hamburgers to shift to the left

e)Which of the following is true of substitute goods?

Substitute goods are goods where an increase in the price of one good causes a decrease in the demand for both goods.

All goods have many substitutes.

Demand for a good is unaffected by the number of substitutes available.

Substitute goods are goods where an increase in the price of one good causes an increase in the demand for the other good.

Answer 1

a) "D"

An increase in the wages will increase the supply cost and that will decrease the supply of pork in the market, shifting the supply curve to the left.

b) "D"

greater opportunity will shift and that will decrease the opportunity cost of chicken.

c) "A"

Taste will not be affected due to PPF.

d) "C"

Increase in the input will shift the supply curve to the left.

e) "D"

Substitute goods are goods where an increase in the price of one good causes an increase in the demand for the other good. as the cross price elasticity for the goods are positive.