If a Technological Advance Makes It Possible to Produce Bananas

question 16

Multiple Choice

If a technological advance makes it possible to produce bananas at a lower cost,

• A) the demand for bananas increases.
• B) the demand for bananas decreases.
• C) the supply of bananas increases.
• D) the supply of bananas decreases.

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Definitions:

Market Equilibrium

A situation in which market supply equals market demand, so there is no incentive for price changes unless external conditions change.

Great Depression

A severe worldwide economic downturn during the 1930s, marked by prolonged unemployment, deflation, and significant declines in economic activity.

Economic Principle

Fundamental concepts that underpin the study and practice of economics, such as supply and demand or the cost-benefit analysis.

Productive Capacity

The maximum output a firm or economy can produce with its current level of resources and technology.