An increase in the level of government price supports for wheat will not make wheat farming more profitable because
A) by definition government actions cannot affect profits.
B) it raises the cost of growing wheat as well as the revenue.
C) profit is the consequence of certainty and government policies are inherently uncertain.
D) the demand for wheat is inelastic.
E) wheat farmers are price takers, not price searchers.
B
You might also like to view...
Economies of scale: a. are the result of a diminishing marginal product
b. pertain to the long run only. c. refer to the increase in output that results from the increased utilization of a single input. d. imply that the average total cost curve will fall continuously as output increases in the short run.
Assume that the central bank purchases government securities in the open market. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and reserve-related (central bank) transactions become more negative (or less positive). b. The GDP Price Index falls, and reserve-related (central bank) transactions remain the same. c. The GDP Price Index and reserve-related (central bank) transactions remain the same. d. The GDP Price Index rises, and reserve-related (central bank) transactions remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
One of the unique problems that banks face is:
A. they hold liquid assets to meet liquid liabilities. B. they hold illiquid assets to meet liquid liabilities. C. they hold liquid assets to meet illiquid liabilities. D. both their assets and their liabilities are illiquid.
Critics of supply-side economics agree that shortly after the Reagan tax cuts were put into place, the economy began to expand. These critics, though, argue that the expansion did not result from the supply-side policies, but rather from
A. the fact that the Federal Reserve dramatically increased the money supply at the same time that the tax cuts became effective. B. a very large increase in the demand for U.S. exports at the same time that U.S. imports fell dramatically. C. the self-correcting nature of the economy. D. the increases in government spending that occurred at the same time the tax cuts became effective.