Answer to Question #238716 in Economics for amanuel

Question

. Define the following terms briefly: Production Possibility Frontier; Scarcity and Shortage; Elasticity of
Demand; Inferior good and normal good; laissez faire.

Answer 1

Production posdibility frontier is the curve that shows different sets of 2 goods which could be made of available resources. Scarcity is the difference between limited resources and unlimited wants. Shortage is a situation on the market when demand exceeds supply. Elasticity of demand is the measure vof change in quantity demanded in response to the change of any factor (price, income, price of other goods). Inferior good is the good whose demand drops when consumer's income increases. Normal good is the good whose denand rises when consumer's income increases. Laissez faire is a policy that stands for the minimum interference of government into people's economic activities.