The Hicks family owns a blueberry farm in Maine. The Ward family owns a blueberry farm in Massachusetts. A drought in Massachusetts destroys half of the Ward family's harvest for one year. For the Ward family, their
a. transitory income for the year of the drought likely exceeds their permanent income.
b. permanent income likely exceeds their transitory income for the year of the drought.
c. transitory income likely will be affected but the permanent income of the Hicks family will increase.
d. permanent income likely will be affected but the permanent income of the Hicks family will not be affected.
b
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Which of the following tools cannot be used by the government to maintain a fixed exchange rate?
A. rationing of foreign exchange B. currency market intervention C. controlling the flow of trade through various barriers D. keeping its level of international reserves strictly fixed
________ choose(s) the quantities of goods and services to produce, while ________ choose(s) the quantities of goods and services to buy
A) Firms; only households B) Households; the government C) Households; firms D) Firms; households and the government E) The government; firms
Which of the following will lead to an outward shift in the firm's short-run demand for labor?
A) an increase in the price of output B) less capital per unit of labor C) a decline in labor productivity D) a reduction in average consumer income
Suppose the demand and supply for strawberries decrease, but the decrease in demand is major while the decrease in supply is minor. Under these conditions
a. price increases, and quantities demanded and supplied decrease b. price decreases, and quantities demanded and supplied increase c. price decreases, and quantities demanded and supplied decrease d. price increases, and quantities demanded and supplied increase e. price remains unchanged, but quantities demanded and supplied increase