Suppose that when the price of wheat is $2 per bushel, farmers can sell 10 million bushels. When the price of wheat is $3 per bushel, farmers can sell 8 million bushels. Which of the following statements is true? The demand for wheat is
a. income inelastic, so an increase in the price of wheat will increase the total revenue of wheat farmers.
b. income elastic, so an increase in the price of wheat will increase the total revenue of wheat farmers.
c. price inelastic, so an increase in the price of wheat will increase the total revenue of wheat farmers.
d. price elastic, so an increase in the price of wheat will increase the total revenue of wheat farmers.
c
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What is the best inference about the impact of a decrease in transportation costs?
a. The demand and supply curves will shift out, which will increase quantities of goods. b. The supply curve will shift out, which will lead to lower prices to consumers. c. Farmers will earn a smaller share of the selling price of their crops. d. The demand curve will shift out, which will lead to higher prices and quantities of goods.
The government agency which has been given the task of calculating the Consumer Price Index (CPI) is
A. the Department of State. B. the Council of Economic Advisors. C. the Bureau of Labor Statistics. D. the Bureau of Economic Research.