Land suitable for growing corn is usually suitable for growing soybeans. From the farmer's perspective, an increase in the price of corn will therefore tend to
A) decrease the demand for soybeans.
B) increase the demand for soybeans.
C) increase the supply (curve) of corn.
D) raise the cost of growing soybeans.
E) reduce the cost of growing soybeans.
D
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Which of the following is a condition for maximum profit?
A) VMP = W. B) VMP = MC. C) MP = W. D) MC = W.
At the end of 2008, the federal funds rate in the United States was close to zero. Which of the following is a major concern associated with such a low rate?
A) That traditional monetary policy will have no impact on the economy. B) Such a low rate spurs excessive consumption and investment spending which may lead to inflation. C) Such a low rate spurs excessive consumption and investment spending which may lead to deflation. D) Economic agents might be unwilling to borrow in anticipation of even lower interest rates.