A country operates inside its production possibilities curve; ...

[Hungry!]

A country operates inside its production possibilities curve; this may be caused by
 
  A) unemployed resources.
  B) total efficiency in industry.
  C) a new resource being discovered.
  D) a lack of modern products being produced.

Question 2

Suppose that initially a market is in equilibrium at a price of 10 and a quantity of 5000 units per day. Several months later, the market is in a new equilibrium at a price of 5 and a quantity of 5000 units per day. What happened in the market?
 
  What will be an ideal response?

[elizabethrperez]

Answer to Question 1

A

Answer to Question 2

For price to fall, either demand had to decrease or supply had to increase, or both. If demand decreased while supply remained constant, the quantity would have decreased too, and if supply increased while demand remained constant, the quantity sold would have increased. Therefore, both demand decreased and supply increased in such a way that the quantity did not change.

[Hungry!]

Gracias!

[FergA]

Excellent