Refer to the graph to the right Which of the following state

Refer to the graph to the right. Which of the following statements is correct regarding computers and corn production in this country ? Consider the market for roses. When the price of roses decreases, this leads to

Solution

Ques 4.

a) False: Points A,B,C and D are feasible, but only points A and B are efficient as well as feasilbe as they lie on the PPF

b) True: A change in population will change the PPF since the consumption basket will change

c) False

d) False: Point B will be preferred as it lies on the PPF and is thus efficient

Ques 5

A fall in the price of roses will lead to an increase in demand (law of demand, negative relation between price and demand) and decrease in supply (law of supply, direct and positive relation between price and supply) and also decrease in quantity supplied of roses (movement along the supply curve)

Thus, all of the above are correct