If Other Factors Remain Unchanged, Technological Progress in Producing Good

question 342

Multiple Choice

If other factors remain unchanged, technological progress in producing good A definitely will lead to

• A) an increase in the market clearing price of good A and a decrease in the equilibrium quantity of good A.
• B) an increase in both the market clearing price and the equilibrium quantity of good A.
• C) a decrease in the market clearing price of good A and an increase in the equilibrium quantity of good A.
• D) a decrease in both the market clearing price and the equilibrium quantity of good A.

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Definitions:

Budget Line

A graphical representation showing the combination of two goods that a consumer can afford given their income and the prices of the goods.

Going Prices

Going prices refer to the current rates or charges for goods and services in a market.

Utility Function

A mathematical representation of how different quantities of goods or services can provide varying levels of satisfaction or utility to an individual.

Labor Income

Earnings obtained from employment, including wages, salaries, and benefits.