Tom Searchinger, a senior attorney at the Environmental Defense Fund, observed that generous farm subsidies have encouraged farmers to produce more corn and more wheat. How does this affect the market for fertilizer?
A) The supply of fertilizer increases.
B) The supply of fertilizer decreases.
C) The demand for fertilizer increases.
D) The demand for fertilizer decreases.
Answer: C
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A firm is currently producing at a level where its MC = 10 and its MR = 5. We can conclude that this firm is
a. profit maximizing. b. under-producing. c. over-producing. d. no definite conclusion can be made about the firm's level of production.
A decrease in the real interest rate will
A) increase consumption and investment. B) increase consumption and reduce investment. C) increase saving and investment. D) decrease investment and government spending.
If the per-worker production function shifts up
A) it now takes more capital per hour worked to get the same amount of real GDP per hour worked. B) the per-worker production function becomes flatter. C) an economy can increase its real GDP per hour worked without changing the level of capital per hour worked. D) negative technological change has occurred in the economy.
An increase in the real interest rate in the United States will cause net capital outflows to ________ and cause the dollar to ________ relative to other currencies
A) increase; appreciate B) increase; depreciate C) decrease; appreciate D) decrease; depreciate