Suppose a farmer knows that he will be able to harvest and sell 3,000 bushels of wheat. Would he prefer a market in which conditions are favorable and most farmers harvest large crops or a market in which conditions are unfavorable and many farmers harvest small crops? Why?
The farmer prefers a market in which conditions are unfavorable because a smaller supply will result in a higher market price. Because demand is inelastic, a higher price leads to higher revenue.
Economics
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According to the "wealth effect," when the ________ falls, the ________ rises
A) price level; the real value of household wealth B) price level; the nominal value of household wealth C) inflation rate; nominal value of household assets D) unemployment rate; average level of household income
Economics
If all resources were perfectly adaptable for alternative uses, the production possibilities curve would
A) be bowed out. B) be bowed in. C) be a straight line. D) not exist.
Economics