In the summer of 1993, there were devastating floods in the midwestern portion of the United States where corn is produced. What effect do you think these floods had on the price of corn and beef? What do you think happened to Canadian corn farmers?
Corn prices rose because of a decrease in supply; the number of suppliers was cut drastically. Beef prices
rose because the cost of a resource (feed) rose, causing the supply of beef to decrease. Canadian farmers
should have experienced an increase in income because an increase in demand from U.S. consumers would
have caused the price of Canadian corn to increase.
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Firms decide how much to spend on product development and marketing by
A) spending the same amount as they did in previous years. B) spending the historical average of 1/4 of total production cost. C) determining what it will take to eliminate excess capacity. D) balancing the cost and the benefit of product development and marketing. E) ensuring that the marginal cost of product development and marketing is less than or equal to the marginal cost of producing the good or service.
______ are end results that require action
a. Goals b. Attitudes c. Values d. Problems
Refer to Figure 6.1. Which of the following statements is false?
A) At point E the marginal product of labor is decreasing. B) At point E the marginal product of labor is negative. C) At point E the average product of labor is decreasing. D) At point E the average product of labor is negative. E) At point E the marginal product of labor is less than the average product of labor.
To determine whether two goods are substitutes or complements, an economist would estimate the:
A. price elasticity of demand. B. income elasticity of demand. C. cross elasticity of demand. D. price elasticity of supply.