Suppose the development of new drought-resistant hybrid seed corn leads to a 50-percent increase in the average yield per acre without increasing the cost to the farmers who use the new technology. If the conditions in the corn production industry are approximated by the price-taker model, which of the following is most likely to occur?
a. The price of corn will increase.
b. The price of soybeans (a substitute for corn) will increase.
c. The profits of corn farmers who quickly adopt the new technology will increase.
d. The profits of corn farmers who do not adopt the new technology will increase.
C
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All else equal, a decrease in the rate of inflation ________ aggregate spending and ________ short-run equilibrium output.
A. decreases; decreases B. increases; increases C. decreases; increases D. increases; decreases
The downward sloping marginal revenue product of labor is
A) the firm's supply of labor. B) the firm's short-run demand for labor. C) the firm's marginal cost of labor. D) another term for the marginal revenue product of labor.
The market supply curve of a resource is
a. downward sloping b. upward sloping c. horizontal at the market price d. vertical e. determined by firms
Protectionism in international trade saves jobs in the specific industry being protected, but costs jobs in other unprotected industries.
Select whether the statement is true or false. A. True B. False