Question

1.

What effect does a rise in the cost of machinery or raw materials have on the cost of a good?
a) A rise in the cost of raw materials (but not machinery) raises the cost. 
b) The good becomes cheaper to produce.
c) The good becomes more expensive to produce.
d) It does not have any effect on the cost of the good.
2.
What does new technology generally do to production?
a) It lowers cost and decreases supply.
b) It lowers cost and increases supply.
c) It increases cost and decreases supply.
d) It has very little effect on production.
Could you please help me with these questions?

Answer 1

b) It lowers cost and increases supply.

Step-by-step explanation:

Answer 2

1. With the rise in the cost of machinery or raw materials, the good becomes more expensive to produce. So the correct option for this question is option “c”. The cost of machinery and raw materials are directly proportional to the increase in cost of any goods.
2. The introduction or advent of new technology lowers cost and increases supply. So for this question the correct option is “b”. New technology always helps to increase the production with lowering of cost and that is the reason behind adopting new technology.