Question

4. if temperatures fall, fewer persons will go on vacation is which type of relationship?

a. normative

b. positive

c. inverse

d. negative

6.the production possibilities curve shifts to the right

a. if prices of the 2 goods fall

b. if we get more money

c. if we get more resources

d. if we produce more of one good and less of the other good

8. if both the price and quantity of eggs rise, which is most likely to have happened?

a. demand for eggs shifts left

b. supply of eggs shift right

c. supply of eggs shifts left

d. demand for eggs shift right

9. if bread and butter are complements, if the price of butter rises

a. demand for butter shifts left

b. demand for bread shifts left

c. demand for bread shifts right

d. demand for butter shifts right

Answer 1

4. Option B

Positive correlation is described as relationship between two variables when two variables move in the same direction. Example Quantity Supplied and Price have positive relationship. In the given information with the fall in temperature, fewer people will go on vacation thus showing positive relationship.

6. Option C

The production possibility curve will shift to the right when there is increase in productive resources.When the technology advances, the production process becomes more efficient, also more resources are being available and as a result more goods and services will be produced.

8. Option D

If demand for eggs rise, then demand curve will shift towards right. Assuming supply remains constant, the new demand curve and supply curve will intersect at new Equilibrium Point. At new Equilibrium Point, Equilibrium Price will increase and Equilbrium Quantity will also increase. When Quantity Demanded is more than Quantity Supplied, a shortage is created which put upward pressure on price and hence Equilibrium Price will rise.

9. Option B

Complimentary Goods are those goods that are jointly demanded. When the price of butter rises, the Quantity Demanded for butter falls due to law of demand. As a result the demand for bread which is a complementary good for butter will fall. As a result the demand curve for bread will shift towards left.