The demand for most farm products is relatively inelastic. A drought that reduces the supply of farm products will also cause farm revenues to fall
Indicate whether the statement is true or false
FALSE
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The term market always refers to
a. an arrangement in which an auctioneer plays at least a limited role in setting prices. b. an arrangement in which buyers and sellers meet at a specific time and place. c. a group of buyers and sellers of a particular good or service. d. a single buyer and seller of a particular good or service.
Which of the following was NOT part of Korean industrial policies?
A) An aggressive promotion of exports along with high levels of protection B) Directed credit and tax breaks given to targeted industries C) Subsidies given to some targeted firms D) Bailing out bankrupt firms without any attempt to dispose distressed firms E) Allowing exporting firms to borrow funds at below-market interest rates
Suppose the lowest-wage state in the United States is West Virginia and the highest-wage state is New York. Which of the following would be true?
a. If New York trades with West Virginia, consumers in New York will be worse off. b. If New York trades with West Virginia, wages in New York will fall until they equal the wages in West Virginia. c. New York would be better off if its state government imposed restrictions on the importation of goods made in West Virginia. d. Both New York and West Virginia will be better off if they are allowed to trade freely.
When positive externalities exist in a market, if a Pigouvian subsidy is imposed:
A. those who interact in the market will gain surplus. B. those who do not interact in the market, but are affected by the externality, will gain surplus. C. those who interact in the market will lose surplus. D. None of these statements is necessarily true.