The high price of agricultural land is basically
A) the cause of high food prices.
B) the result of high food prices.
C) unrelated to food prices because processing costs dominate food prices.
D) unrelated to food prices because there is no opportunity cost of producing land.
B
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The best explanation for the late 1994/early 1995 collapse of the Mexican peso and stock market is
(a) free movement of capital internationally is destabilizing for a developing country. (b) portfolio investments were camouflaging overvalued exchange rates. (c) debt for equity swaps had created imbalances in the ownership structure of the economy. (d) the potential benefits of NAFTA had been oversold.
If a price ceiling is not binding, then a. the equilibrium price is above the price ceiling
b. the equilibrium price is below the price ceiling. c. it cannot be legally enforced. d. None of the above is correct because all price ceilings must be binding.
Store of value
Refer to the accompanying figure. Suppose all the sellers in this market started out charging a price of $45 per unit. What is the most likely result?
A. They would lower their prices because at $45 there would be excess demand. B. They would all make a large profit because $45 is more than the equilibrium price. C. They would lower their prices because at $45 there would be excess supply. D. They would all just break even because $45 is their reservation price.