Premium Essay

Microceconmics

In: Business and Management

Submitted By EMERSON77
Words 260
Pages 2
1.
a) Assuming better education translates into better work skills, then productivity should rise and this would shift the curve outward.
(b) Should not affect location of curve. Production moves inward, away from the curve.
(c) The curve should shift outward as more production is possible with existing resources.
(d) The curve should shift inward with the destruction of resources (capital)

Chapter One Appendix
1.
Graphs can be used to illustrate the relationship between two sets of data. An inverse relationship is when the two variables change in opposite directions. The line is downward sloping. A direct relationship is when the two variables change in the same direction. The line is upward sloping. The inverse relationship is assuming that everything else remains equal.

Chapter Two #7

The excitement of economic profits lured many new “dot-com” into the industries. However, because of a lack of information and a market unable to sustain so many new companies, many failed to realize even a normal profit and failed. Technically many of the early dot-coms were not earning economic profits, but their shareholders were reaping huge windfalls from the stock market speculation. When these new dot-com found that they could not profitably produce in this industry, they dropped out and the industry declined. Consumers demonstrated an interest in these services. The heavy competition of so many dot-com trying to establish themselves in the market led to prices that were insufficient to cover economic costs. An the companies such as Google, eBay etc. won the battle survival of the...

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