Use this link to access approaite figure: http://www.youtube.com/watch?v=RwKi1J_
ID: 1252069 • Letter: U
Question
Use this link to access approaite figure: http://www.youtube.com/watch?v=RwKi1J_fG4E
This a multiple choice question, pick one answer (A-E)
4.
The figure above shows the demand for Restaurant Meals shifting in one direction and the demand for Delivery Meals shifting in another direction. As a result of this shift,
A)
resources flow to Restaurant production and sales and away from Delivery production and sales.
B)
resources flow from where they are more highly valued to where they are less valued in order to reduce costs.
C)
resources flow from Restaurant production and sales to Delivery production and sales.
D)
resources flow from where they are more highly valued to where they are less highly valued in order to reduce prices.
E)
resources flow from where they are more highly valued to where they are less highly valued in order to make the consumer better off.
4.
The figure above shows the demand for Restaurant Meals shifting in one direction and the demand for Delivery Meals shifting in another direction. As a result of this shift,
A)
resources flow to Restaurant production and sales and away from Delivery production and sales.
B)
resources flow from where they are more highly valued to where they are less valued in order to reduce costs.
C)
resources flow from Restaurant production and sales to Delivery production and sales.
D)
resources flow from where they are more highly valued to where they are less highly valued in order to reduce prices.
E)
resources flow from where they are more highly valued to where they are less highly valued in order to make the consumer better off.
Explanation / Answer
If you look at this logically, the answer has to be C. (A) doesn't make sense because if there is a higher demand for delivery meals and the business wants to make money, then they are going to satisfy that demand. The only way to satisfy that demand would be to put more resources into Delivery, not take resources away. (B), (D), and (E) are all wrong for the same reason. They all say that resources will go from where they are highly valued to where they are less valued for whatever reason. Again, logically, this just does not make sense. Moving resources in this way costs more because the resources are not used to their full potential, and thus leads to higher prices, not lower prices, which would definitely not make the consumer better off. Hope this helped!
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