If the market price for a crop is $4.00 a bushel, and the price support is $5.00, then dropping the price support to $3.50
A. will cause nothing to happen.
B. will cause the price received by farmers to fall to $4.00.
C. will cause the price received by farmers to rise.
D. will cause the price received by farmers to fall to $3.50.
Answer: B
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When people buy assets simply because they believe the assets will appreciate and can be sold for a profit, it may cause:
A. a recession. B. unemployment. C. inflation. D. an asset-price bubble.
The market supply curve for any product:
a. always depends on the market demand for that product. b. depends on the general income level of the consumers in the market. c. is a summation of individual firms' supply curves. d. equals the total revenue generated through sale of the commodity. e. is affected by the prices of related products.
What would be the most likely reason for a government to introduce a tax decrease?
a. impeding a monopoly b. reducing unemployment c. lowering interest rates d. overcoming inflation
The Hilltop Coffee Company is a perfectly competitive firm producing where MR = MC. The current market price of a tall café latte is $5.00. Hilltop sells 200 tall café lattes. Its AVC for coffee lattes is $8.00 and its AFC is $3.00. What should Hilltop do?
A. Continue to produce because price exceeds AFC. B. Increase production so that AFC will decrease. C. Decrease production so that AVC will decrease. D. Shut down and produce zero café lattes because price is less than AVC.