The demand for a factor of production will be more inelastic
a. when the cost of the factor is small relative to the total cost of the product.
b. the more elastic the demand for the final product.
c. the easier it is to substitute other resources for the factor.
d. the more elastic the supply of products produced with the resource.
A
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Assume that Australia has a comparative advantage in producing surfboards and New Zealand imports surfboards from Australia. We can conclude that
A) Labor costs are higher for surfboard producers in New Zealand than in Australia. B) Australia also has an absolute advantage in producing surfboards relative to New Zealand. C) Australia has a lower opportunity cost of producing surfboards relative to New Zealand. D) New Zealand has an absolute disadvantage in producing surfboards relative to Australia.
The rationale behind patents is that if inventors and artists cannot secure the returns from successful projects, fewer new inventions and works of art will be produced
Indicate whether the statement is true or false
Refer to the above diagram. If the production possibilities curve of an economy shifts from AB to CD, it is most likely the result of what factor affecting economic growth?
A. An allocation factor. B. An efficiency factor. C. A demand factor. D. A supply factor.
When does a decrease in supply raise the price more: When demand is elastic or when demand is inelastic? When OPEC decreases the supply of oil, the price of gasoline skyrockets. Hence is the demand for gasoline elastic or inelastic?
What will be an ideal response?