Agriculture is the primary occupation in Agraria and agricultural products account for two-thirds of Agraria's gross domestic product
How will a sharp fall in the price of agricultural products affect Agraria's economy if the demand for such products is price-inelastic?
A sharp fall in the prices of agricultural products will lead to a sharp fall in the revenue earned by farmers in Agraria since demand for such products is price inelastic. As farmers earn lower revenue, they will reduce production and employ fewer workers. As a result, unemployment will increase. As more workers become unemployed, the number of mortgage defaults, household bankruptcies, and firm bankruptcies will increase. This, in turn, reduces consumption and investment.
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The figure above shows the market for milk. If 250 gallons of milk a day are available, the ________ price that consumers are willing to pay for the last gallon is ________
A) maximum; $2.50 B) minimum; $2.50 C) maximum; $3.25 D) minimum; $3.25
People continue to value money because they have confidence in its convertibility into goods and services
a. True b. False Indicate whether the statement is true or false