Demand And A Little Scarcity

The opportunity cost of the hospital was the two primary schools. This means that by choosing to build the hospital, the government had to forgo the opportunity to build the two primary schools. The cost of the hospital is not the opportunity cost, but rather the alternative that was not chosen.

If brands J and K are substitutes, it means that they can be used interchangeably to satisfy a particular need or want. When the price of J increases, consumers are likely to switch to brand K as it becomes relatively cheaper. This increase in demand for brand K is a result of consumers substituting J with K due to the price increase. Therefore, an increase in the price of J will increase the demand for K.

The correct answer is that when economists talk about "economic efficiency," they are implying that all economic resources are being fully utilized. This means that there is no wastage or idle resources in the economy, and all resources are being used to their maximum potential. Economic efficiency is important because it ensures that resources are not being wasted and that the economy is operating at its highest level of productivity.

When the price of petrol increases, it becomes more expensive for consumers to purchase petrol. As a result, consumers may choose to reduce their consumption of petrol by driving less or finding alternative modes of transportation. This decrease in demand for petrol leads to a contraction in the quantity of petrol demanded.

A derived demand exists when resources are demanded in the factor market in response to the demand for final goods. This means that the demand for resources is derived from the demand for final goods and services. In other words, when there is an increase in the demand for final products, there is also an increase in the demand for the resources needed to produce those products. This concept highlights the interdependence between the demand for final goods and the demand for resources in the factor market.

A fall in the price of a substitute would actually cause a shift in demand. When the price of a substitute falls, consumers are more likely to switch to the cheaper alternative, leading to a decrease in demand for the original product. Therefore, this factor does cause a shift in demand and is not an exception.

Production possibility curves are likely to be curved rather than straight lines because resources are more productive in certain uses compared to others. This means that some resources are better suited for producing one good compared to another. As a result, the opportunity cost of producing one good increases as more of it is produced, leading to a curved shape on the production possibility curve. This reflects the trade-off between producing different goods and the limited availability of resources.

A shift in demand from D to D1 can be best explained by a decrease in the number of young families. When the number of young families decreases, there will be fewer parents in need of child-care services, resulting in a decrease in demand for child-care. This shift in demand is represented by the movement from D to D1 on the demand curve.