If There Is a Surplus of a Good,the Quantity Demanded

question 169

Multiple Choice

If there is a surplus of a good,the quantity demanded is ________ the quantity supplied,and the price will ________.

• A) less than; rise
• B) less than; fall
• C) greater than; rise
• D) greater than; fall
• E) equal to; fall

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Definitions:

Production Possibilities

Production possibilities involve the various combinations of different goods or services that can be produced in a given economy with available resources and technology, illustrated by the production possibilities frontier.

Production Possibilities Curve

A graphical representation that shows the various combinations of two products that an economy can produce using all its resources efficiently.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, due to the scale of operation increasing.

Opportunity Cost

The abandonment of potential improvements from other possibilities once one choice is made.