Economic growth may be represented by a an a leftward shift

Economic growth may be represented by a (an): a. leftward shift of a production possibilities curve. b. outward shift of a production possibilities curve c. movement along a production possibilities curve. 17. d. production possibilities curve that remains fixed. 18. In economics, investment refers to the process of accumulating: a. capital goods. b. consumer goods. c. money d. stocks and bonds. If you were a government official and wanted to raise the price of wheat, which of the following actions would you take? a. Take wheat from government storage and sell it. b. Encourage farmers to use more fertilizer. c. Lower the price of rye. d. Subsidize purchases of farm equipment. 19. Encourage farmers to grow less wheat. e. 20. A technological breakthrough lowers the cost of manufacturing VCRs. As a result, the market changes to a new equilibrium because of a (an): a. upward movement along the demand curve for VCRs. b. rightward shift in the demand curve for VCRs. c. d. rightward shift in the supply curve for VCRs. shortage of VCRs. 21. Price elasticity of demand is defined as the ratio of the: a. b. c. d. percentage increase in price to an increase in quantity demanded. unit change in quantity demanded to the dollar change in price. maximum amount that consumers will pay to increase quantity. percentage change in quantity demanded to the percentage change in price, other things being equal. 22. A perfectly elastic demand curve c. less than 1. d. infinity

Solution

17) B. Economic growth means outward shift of PPF i.e. Economy can produce more of goods then before.

18)A. Accumulation of capital good is known as investment where capital good include machines, fix capital good which can be used for longer period.

19)E. Encourage farmer to grow less wheat will shift the supply curve leftward, leading to increase in price.

20)C. When cost of production decreases, supply increases leading the supply curve to shift right and decreases the price.

21)D. Price elasticity is the responsivenss of quantity demanded due to change in price=%change in demand/%change in price

22)D. Perfectly elasticity means small change in price leads to huge increase in quantity and elasticty is infinity.