Suppose that the economy of Somerville creates only wind turbines and Renate\'s.
ID: 1223607 • Letter: S
Question
Suppose that the economy of Somerville creates only wind turbines and Renate's. Below is the production possibilities frontier (PPF) of Somerville per year, currently producing at the point labeled A. Points B and C start out stacked on top of point A, but you will move them. Pay attention to the axis values for each point, and enter your answers in thousands, specified to one decimal place. Shift point B to show the economy efficiently 5 producing one thousand more wind turbines. This has an opportunity cost of: Shift point C to indicate Somerville increasing production of wind turbines from point B by another thousand. The shift from point B to C has an opportunity cost of:Explanation / Answer
Price Gouging is a situation when firm sets price artificially at a very high level. It causes harm to the society and reduces welfare. Customers are forced to pay high price for the product and businessman makes super profit by artificially restricting production. So government in most of the cases frames rules and regulations to check such unfair practices.
In this problem, Hurricane has affected severly both North and South Carolina. These two countries have severe shortage of ice. So after hurricane, price of ice moved up to an abnormally high level. In south Carolina there is no anti-price gouging laws. So firms will be less interested to normalize the situation. They are making super profit. Longer it prevails, better it is for them. So it will take a very long period to back to normalcy.
The situation will be different in North Carolina. Here anti-grouging law is in force. So they know that situation will not prevail for Governmet will interfere and bring the price down to normal situation. So firms manufacturing ice will work hard to improve supply of ice. Gradually normal situation will be restored.
Answer: Thus first statement a is true.
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