1. (5 points) Below is a production possibilities curve for a hypothetica hotdogs. Production Possibiity Curve v 0 o & = o T SMARTPHONES a. What is the opportunity cost of the first smartphone produced when moving from point A to B? the second smartphone from point B to C? the third from C to D? The opportunity cost of the first smartphone is hotdogs. The opportunity cost of the second smartphone is hotdogs. The opportunity cost of the third smartphone is hotdogs. b. The questions above illustrate the low of decreasing opportunity costs OR the law of increasing opportunity costs . 2.(5 Points) An island castaway spends 8 hours each day acquiring two itemscoconuts and fishbased on the following production possibilities schedule. Production Scenario Coconuts a. From a starting point of production shown by scenario A, what is the castaway's opportunity cost of catching fish in terms of the number of coconuts sacrificed when moving from one scenario to the next? The opportunity cost of the first fish (scenario A to B) is coconuts. The opportunity cost of the second fish (scenario B to C) is coconuts. The opportunity cost of the third fish (scenario C to D) is coconuts. b. Do these resulis satisfy the law of increasing opportunity costs?( Select best answer) Yes, they do satisfy the law. OR No, they do not satisfy the law. b. The questions above illustrate (Click to select) the law of decreasing opportunity costs the law of increasing opportunity costs . 3.(5 points- Select best answer) A widespread expectation by consumers of lower future incomes affects current sales of flat- sareen TVs. In the market for flat-screen TVs there is a(n) decrease OR increase in supply OR demand . The factor that causes this change is: consumer expectations OR income number of buyers OR number of producers price of related product (5) OR producer expectations OR change in nature resource price price of another product OR state of technology OR consumer preferences . The supply OR demand curve shifts to the right OR left . b. An increase in the price of pesticides affects the market for rice. In the market for rice there is a(n) increase OR decrease in demand OR supply . The factor that causes this change is: state of technology OR number of buyers OR income price of related product (5) OR consumer expectations OR change in nature consumer preferences OR price of another product OR number of producers OR producer expectations resource price . The demand OR supply curve shifts to the right OR left. c. A drop in the number of salmon farms influences the market for salmon. In the market for salmon there is a(n) increase OR decrease in supply OR demand . The factor that causes this change is: income OR producer expectations OR price of another product OR price of reloted product (5) OR number of buyers OR state of technology OR consumer preferences OR number of producers OR resource price OR consumer expectations OR change in nature . The demand OR supply curve shifts to the left OR right . 4. (5 Points Select best answer)) In a particular competitive market, initial equilibrium occurs at a price of $3 and a quantity of 4 million units. Then a shift in supply causes equilibrium price to rise. a. In this case, the supply curve must have shifted to the left OR right . b. Meanwhile, equilibrium quantity in this case must have a(n) decrease OR increase . c. Immediately after the change in supply. there would be a temporary shortage OR surplus in the market which pushes price to its new equilibrium value