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Unformatted text preview: the product is elastic. c) An increase in the price of a product will shift the products supply curve to the right. d) Rent controls are a good way to keep the cost of apartments low for everyone. 3) Briefly explain and graphically illustrate the economic reasoning behind the following newspaper headlines. a) “Bountiful Wheat Crop is Hurting Wheat Growers” b) “Car Rental Firms and Hotels Hit Hard by Higher Air Fares” c) “Bad Weather Limits Fishing: Seafood Prices Double” d) “Minimum Wage Cost Jobs” 4) Why do we expect supply to be more elastic in the long-run than in the short-run? 5) Using a production possibility curve clearly illustrate the concept of opportunity cost. 6) In a capitalistic economy how is the question “What to Produce?” answered? 7) Which would tend to be more elastic – the demand for automobiles or the demand for Ford automobiles? Explain your choice. 8) Define the law of supply....
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This test prep was uploaded on 04/03/2008 for the course ECON 200 taught by Professor Cramer during the Fall '07 term at University of Arizona- Tucson.
- Fall '07