An agricultural corn market faces a positive supply shock due to a beneficial rainy season and the use of new genetically modified seeds. As a result, farmers face the largest crop harvest in decades
Which answer below explains how a farm could actually go bankrupt under this scenario. A) The elasticity of supply for corn is elastic such that a positive shock reduces total revenue.
B) The demand for corn is inelastic such that a positive supply shock reduces total revenue.
C) An inelastic demand curve will cause revenue to fall because price decreases by more than the increase in quantity demanded.
D) B and C
D
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Most migrants move from developing to developed nations
Indicate whether the statement is true or false
Economists often say that trade is a win-win situation. How do you justify this?
Which of the following statements is correct?
a. In order to calculate the inflation rate for the year 2011, we need to know the values of the consumer price index for the years 2009, 2010, and 2011. b. Changes in the consumer price index are often thought to be useful in predicting changes in the producer price index. c. Despite its name, the "consumer price index" really measures the overall cost of the goods and services bought by consumers, business firms, and units of government. d. If the prices of all goods and services changed proportionately over time, then the consumer price index would reflect no substitution bias.
Which of the following explanations of the business cycle focuses on both aggregate supply and aggregate demand shifts?
A. Monetarist explanations B. Keynesian explanations C. Supply-side explanations D. Eclectic explanations