Which of the following accurately describes a surplus?
Consumer demand for a certain car is below the number of cars that are produced.
The production costs for a certain car are below the sale price of that car.
A car company tries to charge too high a price for a car and has to reduce the price.
A reduction in the cost of steel enables a car company to reduce the sale price of its cars.
Which of the following occurs when someone buys a third winter coat?
Decreasing marginal utility
Elasticity
Substitution
Efficient production
All of the following factors affect the level of wages except which of the following?
The law of supply and demand.
Minimum-wage laws.
The actions of labor unions.
The production possibilities frontier.
I'll be glad to comment on your answers.
Decreasing marginal utility
substitution
To determine the answer to the first question, we need to understand what a surplus is. A surplus occurs when there is an excess of a good or service available in the market beyond what is demanded. Let's analyze each option:
1. Consumer demand for a certain car is below the number of cars that are produced: This describes a surplus because the supply of cars exceeds the demand for them.
2. The production costs for a certain car are below the sale price of that car: This does not accurately describe a surplus. It may indicate a profitable situation for the car company, but it does not relate to the concept of a surplus.
3. A car company tries to charge too high a price for a car and has to reduce the price: This describes a situation where the price is eventually reduced due to low demand. It does not directly describe a surplus, which is an excess supply.
4. A reduction in the cost of steel enables a car company to reduce the sale price of its cars: This does not directly describe a surplus, as it focuses on cost reduction rather than excess supply. It may, however, lead to a surplus if the reduced prices stimulate higher demand.
Therefore, the answer to the first question is option 1: Consumer demand for a certain car is below the number of cars that are produced.
Moving on to the second question, which asks what occurs when someone buys a third winter coat:
1. Decreasing marginal utility: This is a concept in economics where the additional satisfaction derived from consuming each additional unit of a good diminishes. While it may happen when someone buys a third winter coat, it does not specifically answer the question.
2. Elasticity: Elasticity refers to the responsiveness of the quantity demanded or supplied to a change in price. It is not directly related to buying a third winter coat.
3. Substitution: Substitution occurs when consumers switch from one good to another due to changes in relative prices or preferences. It is also unrelated to the question.
4. Efficient production: Efficient production refers to producing goods or services using the least amount of resources. It is not directly related to buying a third winter coat.
None of the given options directly answer the question of buying a third winter coat. Therefore, none of the options are accurate responses to the question.
Finally, for the last question, all of the factors mentioned can affect the level of wages. Analyzing each option:
1. The law of supply and demand: The law of supply and demand is a fundamental theory in economics that explains how the prices of goods and services are determined based on the balance between supply and demand. It directly influences wages.
2. Minimum-wage laws: Minimum-wage laws set a minimum price that employers must pay their workers. Therefore, they directly impact wages.
3. The actions of labor unions: Labor unions can negotiate collective bargaining agreements that affect wages and working conditions. Hence, they influence wages.
4. The production possibilities frontier: The production possibilities frontier represents the maximum potential output of two goods given the available resources and technology. Although it does not directly determine wages, it indirectly affects them as the level of economic output influences labor demand and, consequently, wages.
Therefore, all of the options mentioned do affect the level of wages.