Answer to Question #152856 in Macroeconomics for Hamza Ahsan

Question

Question 1

(a) An economy is at the brink of running out of an important natural resource at a time when it is introducing improved technology. Explain how these events will affect the economy’s production possibility curve.

(b) Explain using a PPF why scarcity makes choices inevitable for the firms and how each choice has an opportunity cost?

(c) How are resources allocated in a market economy?

(d) What are the possible undesirable outcomes of a pure market economy?

(e) Explain the meaning of “public good” and “private good”. Can a free market provide a public good?

Answer 1

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