Suppose that corn prices rise significantly. If farmers expect the price of corn to continue rising relative to other crops, then we would expect:
A. the supply of ethanol, a corn-based product, to increase.
B. consumer demand for wheat to fall.
C. the supply to increase as farmers plant more corn.
D. the supply to fall as farmers plant more of other crops.
Answer: C
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A ________ model of the household assumes that a family maximizes its happiness under a budget constraint that pools all of its income, wealth, and time
A) unitary B) secondary C) tertiary D) primary
If there is an improvement in technology that affects only Aggregate Supply and a nation's wealth falls due to a sagging stock market, then:
a. Price index rises, and real GDP rises. b. Price index rises, and real GDP falls. c. Price index rises, and the change in real GDP is uncertain. d. Price index falls, and real GDP rises. e. Price index falls, and the change in real GDP is uncertain.