Prices of farm products are
A. The result of government-enforced price ceilings in the farming industry.
B. Subject to short-term swings.
C. Below the market equilibrium price because of price support programs.
D. Very stable in the short run.
Answer: B
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Substitutes
What will be an ideal response?
Suppose that you have wheat in storage and that the price of wheat is currently $7.00 per bushel. You can sell your wheat immediately but you also have an opportunity to sell in six months. At that time, you believe the price of wheat will be $8.00 per bushel. Your cost of storage is $0.75 per bushel for six months. One dollar in six months is worth one dollar today (no time preference). What strategy is profit maximizing?
A. Hold onto your wheat and sell in six months. B. Sell your wheat today. C. Minimize your losses by exiting the wheat market. D. Expand production to sell more wheat.
If an economy were experiencing a high rate of unemployment as the result of insufficient aggregate demand, a Keynesian economist would favor:
A. a reduction in taxes coupled with a reduction in government expenditures of equal size. B. an increase in government expenditures coupled with an increase in taxes of equal size. C. a reduction in taxes, without any offsetting reduction in government expenditures. D. maintenance of a balanced budget.
Recall the Application about the benefits provided by the LoJack auto recovery system to answer the following question(s).Recall the Application. LoJack is system that allows the police to track stolen cars. Car owners who do not buy LoJack systems still benefit because:
A. the owner of a LoJack system gets a break on his auto theft insurance. B. the owners of LoJack earn profits. C. thieves don't know which cars have LoJack. D. All of these