Figure 2.3 Figure 2.3 Shows Various Points on Three Different Production Possibility

question 103

Multiple Choice

Figure 2.3

Figure 2.3 shows various points on three different production possibility frontiers for a nation.
-Refer to Figure 2.3. Consider the following events:
A.an increase in the patent protection period to 30 years
B.an increase of a nation's capital stock
C.an improved property rights system
Which of the events listed above could cause a movement from V to W?

• A)a only
• B)a and b only
• C)a and c only
• D)a, b and c

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Definitions:

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, resulting in market balance.

Bushels Demanded

The quantity of a commodity, such as wheat or corn, measured in bushels, that buyers are willing to purchase at a given price.

Bushels Supplied

Bushels Supplied refers to the quantity of agricultural products, measured in bushels, that producers are willing to sell at a given price.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level, in a given time period.