Suppose farmers in a given market can either grow soy beans or corn on their land. In addition, suppose an increase in the demand for corn causes the price of corn to increase. As a result of the increase in the price of corn, farmers who were already growing corn will earn an:
A. economic loss in the short run.
B. economic profit in the long run.
C. economic loss in the long run.
D. economic profit in the short run.
Answer: D
You might also like to view...
Refer to the above figures. An external cost exists. This will lead to a(n)
A) underproduction equal to Q1 minus Q2. B) overproduction equal to Q4 minus Q3. C) underproduction equal to Q4 minus Q3. D) overproduction equal to Q1 minus Q2.
Suppose that when disposable income increases by $2,000, consumption spending increases by $1,500. Given this information, we know that the marginal propensity to consume (MPC) is
A) .25. B) .75. C) $1,000/$750 = 1.33. D) 1/.25 = 4.
Import quotas on products will increase the price consumers pay for imported products and:
Decrease the volume of exports Decrease the volume of imports Increase the volume of imports Have no effect on the volume of imports or exports
The hypothesis that regulators eventually are controlled by the regulated firms and their special interests is the
A. share-the-gains, share-the-pains hypothesis. B. control-group hypothesis. C. public interest theory. D. capture hypothesis.