There Is a Technological Advance in the Production of a Good

question 66

Multiple Choice

There is a technological advance in the production of a good and simultaneously also an increase in the expected future price. Which of the following will happen?

• A) The equilibrium price will rise because the supply curve shifts rightward.
• B) The equilibrium price falls because the supply curve shifts leftward.
• C) The technological improvement shifts the supply curve rightward while the increase in the expected future price shifts the supply curve leftward. The net effect is not known.
• D) The demand curve shifts rightward and the supply curve does not shift.

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Definitions:

Agency

A relationship where one party, the agent, is authorized to act on behalf of another, the principal, in dealings with third parties.

Necessity

The condition or situation of being required or indispensable, often invoked in legal contexts where actions are taken out of an unavoidable need.

Contract

A legally binding agreement between two or more parties.

Warranty of Authority

An assurance provided by an agent to a third party that they have the authority to act on behalf of another person or entity in a legal or business transaction.