Answer to Question #204529 in Microeconomics for Kelebogile

Question

Indicate whether each of the following statements is True or False. In each case give a brief explanation for your choice. I

1-Countries like Finland and Norway are unlikely to suffer from the scarcity problem as defined in economic theory.

2-A new highway between Port Elizabeth and East London is a good example of a consumer good.

3-In the economic circular flow model, capital formation is a flow that is mainly linked to firms.

4-The quantity of a good demanded can be indicated as Qd = f(Px) ceteris paribus.

Answer 1

1) True.

Both Finland and Norway Nordic countries that adopted Nordic model that has capitalist features such as economic efficiency with a higher percentage of population workforce employed by the public sector this, reducing scarcity of unlimited wants.

2) True.

Port Elizabeth consumers live a better quality life hence the city suits first time consumers who are attracted with the top tourist attractions in East London which makes the new highway between Port Elizabeth and East London a good example of consumer good.

3) False.

Capital formation is mainly linked to capital stock of a country through saving and investing in making stock capital goods such as machine tools, transport equipments e.t.c that can be used in future production of more goods.

4) True.

Quantity of demanded is the ability and willingness to pay a price for a specific good and the equation can be abbreviated as Qd= f(Px).