1. What effect does a rise in the cost of machinery or raw materials have on the cost of a good?
The good becomes more expensive to produce. A raw material is a standard or basic material that a good is produced from. A raw material can be wood from a tree, water, meat, minerals, and fuels. If the cost of machinery rises, it is more expensive to retrieve the raw materials and so it increases the cost of the good.
2. What does new technology generally do to production?
It lowers cost and increases supply. Typically when a company or individual develops a new type of technology, they are able to cut the cost of production down because newer technology leads to more advanced and productive inter-workings. When there is new technology production can happen quicker which leads to an increase in the supply of products being produced.
3. Why does the United States regulate automobile manufacturing in so many ways?
To offset the air pollution caused by automobiles. Though cars are needed for transportation and are extremely important for everyday life in the United States, they are extremely toxic and toxic to produce. Having regulations on automobile manufacturing helps to product the air we breath and the Earth.
4. When any effort by government causes the supply of a good to rise, what happens to the supply curve for that good?
It shifts to the right. The supply curve is a graph within economics that shows the relationship a good or service has with the price and quantity demanded of the supply. The product price is shown on the vertical axis on the graph and the quantity supplied is on the horizontal axis. When the government causes the supply of a good to rise, the curve will cause a shift to the right.
5. How do future expectations about the price of a good affect the present supply?
If the price is expected to increase, many producers will hold onto their supply. If there are expectations of a good to rise, some producers will hold onto their supply so that they can sell it off at a higher price. Likewise, if it is looking like a price may fall, a producer will try and get it sold before the increase causes an affect on them.
6. If prices rise and income stays the same, what is the effect on demand?
Fewer goods are bought. If the price of an item rises but someones wage does not rise, they will likely purchase less of that item. They will have less money to spend on things so the effect on demand would show a decline.
7. How can the demand for one good be affected by increased demand for another one?
If goods are used together, increased demand for one will increase demand for the other. Demand is relative to the price and need for an item, if an item is needed the demand will rise. Gas and a car are examples of two goods that can be affected based off demand. If the demand for a car rises, there is usually an increase in the demand for gas.
8. How does the price range affect the elasticity of demand for a product?
Demand for a good can be inelastic at a low price, but elastic at a high price. Elasticity of demand is a measurement used to show how responsive the quantity of a good or service is demanded when nothing besides the price of the good changes.
9. What is the principle of the law of supply?
The higher the price, the larger the quantity produced. The law of supply is a fundamental principle in economics. This principle states that if nothing changes but the price rising there is an increase in quantity supplied. Basically, there is an equal relationship between the price and quantity of a good or service.
10. How is the total cost of a factory or other production site determined?
Fixed cost plus variable cost. When figuring out the total cost of a factory or product a company has to take into account their fixed costs of each month to run the building and then plan for variable costs that will be changing each month.
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