Question: These are two essay questions. Please select one of the two questions. Note, that question #1 has multiple parts; if you select that question, you must answer all parts of the question. Question #2 has two main parts, and both must be answered.
1. Explain how each event affects production possibilities.
(a) The population becomes more educated over time as the number of high school dropouts falls and the number of college graduates rises.
(b) The unemployment rate declines from 7.3 to 4.5 percent of the labor force.
(c) Businesses and government are unable to solve a major computer problem, thus reducing economic efficiency and national output.
(d) Advances in telecommunications and new technology significantly contribute to economic growth over time.
(e) The Congress and the President decide to allocate more resources to national defense.
(f) A nation participates in increased international trade with other nations of the world.
2. Explain what is meant by the term "market failure" by giving two major types of such failures. Then explain the reasons behind each type of failure.