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Homework answers / question archive / 1)Which of the following factors of production is a natural resource or natural input? Farmland Financial assets Equipment Labor

1)Which of the following factors of production is a natural resource or natural input? Farmland Financial assets Equipment Labor

Economics

1)Which of the following factors of production is a natural resource or natural input? Farmland Financial assets Equipment Labor.

2)Use the following example to illustrate David Ricardo's principle of comparative advantage, repeating each step of the process outlined in Question 1. Explain also how both countries can gain frorf trade, even though Brazil has the absolute advantage in both wheat and autos. Argentina Brazil Output per worker Wheat Autos 1.5 0.5 2 1 Total labor supply 12 12.

3)Suppose that the consumers expect the price of phones to be $100 per unit next year. A news report comes out that claims phones will be only $50 per unit next year. Assuming there is no change in supply currently, which of the following will happen to the current equilibrium price and quantity of phones?

a. Price of phones rises. Quantity of phones rises.
b. Price of phones rises. Quantity of phones falls.
c. Price of phones falls. Quantity of phones rises.
d. Price of phones falls. Quantity of phones falls.
e. Price of phones changes in an uncertain direction. Quantity of phones rises.


I know what the answer is, but I need an explanation please. I understand why the price of phones would fall, but I'm unsure about the quantity. If customers expect the price phones to be $100 but find out it'll be $50 next year, wouldn't customers wait to buy a phone until next year for the price to be $50? Then the quantity would increase since there are no buyers?

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