Answers
Answer 1
Option c) F
Reason: Point F (10,4) is an inefficient level of production as this point is not on the Production Possibility Frontier but below it. This means that the economy is not utilizing all its resources efficiently.
Answer 8
Option a) The quantity demanded increases to 1000 cars.
Reason:
When price decrease quantity demanded increases. This is what happens when price falls from $8000 to $7000.
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