The governmental expense of a farm price support tends to increase as the price of the good falls.
Answer the following statement true (T) or false (F)
True
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An economy is in long-run equilibrium when output equals potential output. Why is there no long-run equilibrium rate of "potential inflation"?
What will be an ideal response?
According to the graph shown, if this were depicting an autarky, the amount being sold domestically is:
This graph demonstrates the domestic demand and supply for a good, as well as the world price for that good.
A. 60.
B. 115.
C. 160.
D. 90.
Which of the following examples would likely have the highest elasticity of demand if the price of the product changed?
a. Jana spends $10,000 of her weekly paycheck of $40,000 on an automobile. b. Roberta spends $400 of her weekly paycheck of $2,000 on a video game player. c. Terence spends $100 of his weekly paycheck of $1,500 on a theater ticket. d. Seo-jun spends $1,500 of his weekly paycheck of $3,000 on a motorcycle.
Firms discount future profits at the interest rate r because
A) it is the interest rate on their debt. B) it is the same rate as for households. C) Ricardian equivalence holds. D) it has to equal the marginal productivity of capital in equilibrium.