Which of the following (according to the ceteris paribus assumption) is assumed
ID: 1218302 • Letter: W
Question
Which of the following (according to the ceteris paribus assumption) is assumed to be held constant when moving along a demand curve?
The price of the good itself
The number of buyers
The number of sellers
d. Factor costs
A production possibilities curve indicates the:
combinations of goods and services an economy is actually producing
maximum combinations of goods and services an economy can produce given its available resources and technology
maximum combinations of goods and services an economy can produce given its unlimited resources
d. average combinations of goods and services an economy can produce given its available resources and technology
A downward sloping linear production possibilities curve (frontier) for a country implies:
it faces increasing opportunity costs
it faces decreasing opportunity costs
it faces zero opportunity costs
d. it faces constant opportunity costs
Assume we have a usual downward-sloping demand curve (in price and quantity space), where price is on the vertical (or y) axis and quantity is on the horizontal (or x) axis. This demand curve shows a:
a positive relationship between demand and price
a negative relationship between demand and price
a positive relationship between quantity demanded and price
a negative relationship between quantity demanded and price
a.The price of the good itself
b.The number of buyers
c.The number of sellers
d. Factor costs
A production possibilities curve indicates the:
a.combinations of goods and services an economy is actually producing
b.maximum combinations of goods and services an economy can produce given its available resources and technology
c.maximum combinations of goods and services an economy can produce given its unlimited resources
d. average combinations of goods and services an economy can produce given its available resources and technology
A downward sloping linear production possibilities curve (frontier) for a country implies:
a.it faces increasing opportunity costs
b.it faces decreasing opportunity costs
c.it faces zero opportunity costs
d. it faces constant opportunity costs
Assume we have a usual downward-sloping demand curve (in price and quantity space), where price is on the vertical (or y) axis and quantity is on the horizontal (or x) axis. This demand curve shows a:
a.a positive relationship between demand and price
b.a negative relationship between demand and price
c.a positive relationship between quantity demanded and price
d.a negative relationship between quantity demanded and price
Explanation / Answer
Which of the following (according to the ceteris paribus assumption) is assumed to be held constant when moving along a demand curve?
The Law of Demand states that, ceteris paribus, there is a negative relationship between the price of a good and the quantity demanded therefore in this case b)The number of buyers is assumed to be constant.
A production possibilities curve indicates the production possibilities of an economy--the alternative combinations of two goods that an economy can produce with given resources and technology. , it is the maximum production possible given existing (fixed) resources and technology. Therefore answer is b.
A downward sloping linear production possibilities curve (frontier) for a country implies:
The curve is a downward-sloping straight line, indicating that there is a linear, negative relationship between the production of the two goods. b.it faces decreasing opportunity costs.
Assume we have a usual downward-sloping demand curve (in price and quantity space), where price is on the vertical (or y) axis and quantity is on the horizontal (or x) axis. This demand curve shows:
a negative relationship between demand and price
it faces decreasing opportunity costs
b.a negative relationship between demand and price
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