Which of the following illustrates the basic idea of "parity" as a cornerstone of U.S. agricultural policy?
A. The price of corn per bushel should be held constant
B. A bushel of corn should exchange for more of all goods today than previously because farm incomes have declined
C. If a bushel of corn exchanged for a pair of pants at a previous time, the same rate of exchange should prevail today
D. If a bushel of corn exchanged for a pair of pants at a previous time, the rate of exchange today should be two bushels of corn for one pair of pants since productivity in farming has increased faster than in pants manufacturing
C. If a bushel of corn exchanged for a pair of pants at a previous time, the same rate of exchange should prevail today
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Governments establish price floors when it is believed the market equilibrium price is too high
Indicate whether the statement is true or false
Which of the following would cause the present optimal extraction level of a nonrenewable resource to fall?
A. An increase in the present value of expected future profits. B. A decrease in extraction costs. C. A decrease in user costs. D. An increase in the current price of the resource.
Compared to a perfectly competitive industry, a single-price monopoly produces
A) more output. B) less output. C) the same output. D) some amount that might be more, less, or the same depending on whether the monopoly's marginal revenue curve lies above, below, or on its demand curve. E) some amount that might be more, less, or the same depending on whether the monopoly's marginal cost curve lies above, below, or on its marginal revenue curve.
If Bert has budget constraint A in the graph shown, what is his opportunity cost of three gallons of milk?
This graph shows three different budget constraints: A, B, and C.
A. Twelve cases of soda
B. Eight cases of soda
C. Four cases of soda
D. It is impossible to say without knowing Bert's income.