Explain why the ratio of farm prices to nonfarm prices fell 60 percent between 1910-1914 and 2001.
What will be an ideal response?
The ratio of farm prices to nonfarm prices fell 60 percent between 1910-1914 and 2001 because technology improved very rapidly over this period, leading to large rightward shifts in the supply of food, while demand grew slowly over this period, leading to a small rightward shift in the demand for food.
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Refer to Figure 10-6. The loanable funds market is in equilibrium, as shown in the figure above
As a result of an increase in the government budget deficit, the ________ for loanable funds will ________, thereby ________ the equilibrium real interest rate and ________ the equilibrium quantity of loanable funds. A) supply; rise; decreasing; increasing B) demand; fall; decreasing; decreasing C) demand; rise; increasing; decreasing D) supply; fall; increasing; decreasing
A decrease in price:
A. does not change quantity demanded if demand is elastic. B. does not cause a quantity effect when demand is perfectly inelastic. C. causes a decrease in total revenue due to the quantity effect. D. causes an increase in total revenue due to the price effect.
The above figure shows a payoff matrix for two firms, A and B, that must choose between a high-price strategy and a low-price strategy. Both firms setting a high price is not a Nash equilibrium because
A) setting a high price is the dominant strategy for each firm. B) neither firm can improve its payoff by setting a low price given that the other firm is setting a high price. C) there is no dominant strategy for either firm. D) both firms can improve their payoff by setting a low price given that the other firm is setting a high price.
Jacinda, a college student, waits tables at a local diner to earn extra cash. In order to differentiate herself from other wait staff, Jacinda took a life saving course from the local hospital, where she learned the proper procedures to use in cases of choking. This is an example of a market signal.
Answer the following statement true (T) or false (F)