Discuss the continuing problem with farm policy after the Food, Conservation and Energy Act of 2008
What will be an ideal response?
The Food, Conservation and Energy Act of 2008 helped decrease the risk for farmers of price and income changes and helped stabilize farm incomes. Without the subsidies, farm prices and incomes would be low. The continuing problem is the ongoing cost of subsidies for agricultural production. These subsidies keep agricultural production at a higher level than would be produced by the competitive market and also slows the exit of resources from agriculture to other uses in the economy.
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Assume the table shown is for a hat factory, and shows the total production of hats given various numbers of employees. Adding a third worker increases production:
A. by 60 hats.
B. by more than the second worker.
C. to 110 hats.
D. All of these are true.
Suppose that competitive price-searcher firms are earning positive profits. In the transition from this initial situation to a long-run equilibrium,
a. the number of firms in the market decreases. b. each existing firm experiences a decrease in demand for its product. c. each existing firm experiences a rightward shift of its marginal revenue curve. d. each existing firm experiences an upward shift in its average total cost curve.
Which of the following is a role of financial institutions?
a) Increasing product demand. b) Diversifying assets to reduce risk. c) Establishing marginal tax rates. d) Controlling inflation.
If the music industry was perfectly competitive, then all performers would
A. produce a non-standardized product. B. charge the same price for concerts, but not necessarily play the same music. C. play the same music, but not necessarily charge the same price for concerts. D. play the same music and charge the same price for concerts.