Agriculture is the primary occupation in Agraria and agricultural products account for two-thirds of Agraria's gross domestic product
How will a sharp fall in the price of agricultural products affect Agraria's economy if the demand for such products is price-inelastic?
A sharp fall in the prices of agricultural products will lead to a sharp fall in the revenue earned by farmers in Agraria since demand for such products is price inelastic. As farmers earn lower revenue, they will reduce production and employ fewer workers. As a result, unemployment will increase. As more workers become unemployed, the number of mortgage defaults, household bankruptcies, and firm bankruptcies will increase. This, in turn, reduces consumption and investment.
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Which of the following happens if the real interest rate of an economy rises?
A) Labor demand increases. B) Labor supply falls. C) Investment falls. D) Consumption increases.
The proper economic method of selecting a sentence length would be to
A. compare the average cost of crime being perpetrated by the average offender if released a year earlier with the average incarceration costs for that shorter sentence. B. compare the total cost of crime being perpetrated by the offender if released a year earlier with the incarceration costs for that shorter sentence. C. poll pro bono defense attorneys and follow their recommendation. D. compare the reduction in the total cost of (marginal cost) crime being perpetrated by the offender if released a year earlier with the reduction in incarceration costs (marginal benefit) for that shorter sentence.
When the average physical product is rising
A) total cost is falling. B) average total cost is increasing. C) average variable cost is falling. D) marginal cost is always rising.
The process by which resources are transformed into useful forms is
A. capitalization. B. production. C. consumption. D. allocation.