To Conduct a General Equilibrium Analysis of a Change in Consumer

question 78

Multiple Choice

To conduct a general equilibrium analysis of a change in consumer preferences away from beef and toward chicken, you must consider

• A) changes in the equilibrium prices and quantities of beef and chicken.
• B) changes in the amount of resources allocated to the production of beef and chicken.
• C) changes in the price of resources allocated to the production of beef and chicken.
• D) all of the above

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Definitions:

Production Function

An economic model that describes the relationship between input resources and the output of goods for a specific period.

Short-Run Cost Function

A representation of how total production costs change with output levels in the short term, when some factors are fixed.

Quasi-Fixed Costs

Costs that are not directly variable with the level of output but can change over time with scale of operations, such as salaries for permanent staff.

Positive Output

Production of goods or services in a quantity that exceeds zero.