Question

In: Economics

Which of the following is not a "false" statement in economics? Question 3 options: Scarcity means...

Which of the following is not a "false" statement in economics?

Question 3 options:

Scarcity means that the available economic (limited) resources are enough to produce the goods and services necessary to satisfy all of the unlimited human wants.

The production possibility frontier (PPF) for an economy illustrates the different combinations between two products that an economy can produce when all resources are fully employed, with an unchanged available amounts of resources, and for a level of technology that only advances and never regresses.

Points along the country's production possibilities frontier (PPF) are feasible and efficient in the production, while points below the country's PPF are infeasible and inefficient in the production.

The low of supply states that, other things being equal for a rational supplier under the normal circumstances, the higher the price of the product, the higher the quantity supplied from that product, and vice versa.

Solutions

Expert Solution

Answer to question 3 :-

Option D - the law supply states that other things being equal for a rational supplier under the normal circumstances the higher the price of the product of the higher the quantity supplied from that product, and vice versa.

Reason :-

  • As we know that the supply curve is upward sloping from left to right which clearly implies that all other conditions being equal, the supply of the product Rises along with the price of the product .There is a direct relationship between price of a product and its quantity supplied
  • Option A is false because scarcity means that the available economic resources are limited in nature and are not enough to satisfy all human wants which are unlimited in nature
  • Option B is false because the level of Technology neither regresses nor advances but stays the same. If the technology will advance the economy will be able to produce more amount of output using the same resources which will shift the PPF to right.
  • Option C is false because points that are below the country's production possibility Frontier are feasible however they are inefficient in production.


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