Question 1

Because the demand for wheat tends to be inelastic,the development of a new,more productive hybrid wheat would tend to
A) increase the total revenue of wheat farmers.
B) decrease the total revenue of wheat farmers.
C) decrease the demand for wheat.
D) decrease the supply of wheat.

Accepted Answer

The answer of Because the demand for wheat tends to...

Question 2

The supply of oil is likely to be
A) inelastic in both the short run and long run.
B) elastic in both the short run and long run.
C) elastic in the short run and inelastic in the long run.
D) inelastic in the short run and elastic in the long run.

Accepted Answer

In the short run, it is difficult for oil producers to increase or decrease their output significantly. Thus, the supply of oil is relatively inelastic in the short run. However, in the long run, oil producers can invest in exploration, development, and production, which allows them to respond more quickly to changes in demand. Therefore, the supply of oil is more elastic in the long run.

Question 3

Suppose that corn farmers want to increase their total revenue.Knowing that the demand for corn is inelastic,corn farmers should
A) plant more corn so that they would be able to sell more each year.
B) increase spending on fertilizer in an attempt to produce more corn on the acres they farm.
C) reduce the number of acres on which they plant corn.
D) contribute to a fund that promotes technological advances in corn production.

Accepted Answer

The answer of Suppose that corn farmers want to increase...

Question 4

Suppose researchers at the University of Wisconsin discover a new vitamin that increases the milk production of dairy cows.If the demand for milk is relatively inelastic,the discovery will
A) raise both price and total revenues.
B) lower both price and total revenues.
C) raise price and lower total revenues.
D) lower price and raise total revenues.

Accepted Answer

The answer of Suppose researchers at the University of Wisconsin...

Question 5

A decrease in supply will cause the smallest increase in price when
A) both supply and demand are inelastic.
B) demand is elastic and supply is inelastic.
C) both supply and demand are elastic.
D) demand is inelastic and supply is elastic.

Accepted Answer

The answer of A decrease in supply will cause the...

Question 6

How did the farm population in the United States change between 1950 and today?
A) It dropped from 10 million to fewer than 3 million people.
B) It dropped from 20 million to fewer than 5 million people.
C) It dropped from 30 million to just over 6 million people.
D) It increased from 10 million to almost 13 million people.

Accepted Answer

Between 1950 and today, the farm population in the United States dropped from 10 million to fewer than 3 million people. This was largely due to advances in technology and mechanization of farming, which allowed for increased productivity with fewer workers. Additionally, many people left rural areas for urban areas in search of better economic opportunities.

Question 7

If soybean farmers know that the demand for soybeans is price inelastic,in order to increase their total revenues they should
A) use more fertilizers and weed killers to increase their yields.
B) plant additional acres to increase their output.
C) reduce the number of acres they plant to decrease their output.
D) Both a and b are correct.

Accepted Answer

The answer of If soybean farmers know that the demand...

Question 8

Between 1950 and today there was a
A) 20 percent drop in the number of farmers,but farm output more than tripled.
B) 30 percent drop in the number of farmers,but farm output more than tripled.
C) 50 percent drop in the number of farmers,but farm output more than doubled.
D) 70 percent drop in the number of farmers,but farm output more than doubled.

Accepted Answer

The answer of Between 1950 and today there was a
A)...

Question 9

An advance in farm technology that results in an increased market supply is
A) good for farmers because it raises prices for their products but bad for consumers because it raises prices consumers pay for food.
B) bad for farmers because total revenue will fall but good for consumers because prices for food will fall.
C) good for farmers because it raises prices for their products and also good for consumers because more output is available for consumption.
D) bad for farmers because total revenue will fall and bad for consumers because farmers will raise the price of food to increase their total revenue.

Accepted Answer

The answer of An advance in farm technology that results...

Question 10

In the early 1970s,OPEC's goal was to
A) decrease the world-wide price of oil so that the quantity demanded increased,thus raising total revenues for OPEC members.
B) increase the world-wide price of oil by reducing the quantity of oil supplied.
C) increase the world-wide price of oil by increasing the quantity of oil supplied,thus raising total revenues for OPEC members.
D) decrease the world-wide price of oil so that quantity demanded increased.

Accepted Answer

OPEC's goal in the early 1970s was to increase the world-wide price of oil by reducing the quantity of oil supplied. This was achieved through an oil embargo and production cuts. The goal was to increase profits and gain more control over the oil industry.

Question 11

Table 5-6
 
-Refer to Table 5-6.Which scenario describes the market for oil in the long run?
A) A
B) B
C) C
D) D

Accepted Answer

The answer of Table 5-6
 
-Refer to Table 5-6.Which scenario...

Question 12

Farm programs that pay farmers not to plant crops on all their land
A) hurt farmers by lowering their total revenue and hurt consumers by causing shortages of some food items.
B) help farmers by cutting costs,which helps consumers by lowering food prices.
C) help farmers by increasing total revenue in the market but hurt consumers by raising food prices.
D) help farmers directly since they receive government payments but have no real effects on consumers.

Accepted Answer

The answer of Farm programs that pay farmers not to...

Question 13

Table 5-6
 
-Refer to Table 5-6.Which scenario describes the market for oil in the short run?
A) A
B) B
C) C
D) D

Accepted Answer

The answer of Table 5-6
 
-Refer to Table 5-6.Which scenario...

Question 14

There are fewer farmers in the United States today than 200 years ago because of
A) improvements in farm technology.
B) increased government regulations in farming.
C) an elastic demand for food.
D) environmental programs designed to reduce soil erosion.

Accepted Answer

Advancements in farm technology have allowed farmers to be more efficient and productive, leading to a decline in the number of farmers needed to produce food.

Question 15

The discovery of a new hybrid wheat would increase the supply of wheat.As a result,wheat farmers would realize an increase in total revenue if the
A) supply of wheat is elastic.
B) supply of wheat is inelastic.
C) demand for wheat is inelastic.
D) demand for wheat is elastic.

Accepted Answer

The answer of The discovery of a new hybrid wheat...

Question 16

A decrease in supply will cause the largest increase in price when
A) both supply and demand are inelastic.
B) both supply and demand are elastic.
C) demand is elastic and supply is inelastic.
D) demand is inelastic and supply is elastic.

Accepted Answer

When both supply and demand are inelastic, a decrease in supply will not be met with a significant change in quantity demanded, leading to a larger increase in price compared to other scenarios. Elasticity measures how much the quantity demanded or supplied responds to changes in price. Inelastic demand or supply means that the quantity demanded or supplied changes very little with price changes. Therefore, if supply decreases and neither consumers nor producers are responsive to price changes (inelastic), the price has to increase significantly to reach a new equilibrium.

Question 17

In the market for oil in the short run,demand
A) and supply are both elastic.
B) and supply are both inelastic.
C) is elastic and supply is inelastic.
D) is inelastic and supply is elastic.

Accepted Answer

The answer of In the market for oil in the...

Question 18

Good news for farming can be bad news for farmers because the
A) supply curve for an individual farmer is usually perfectly elastic.
B) supply curve for an individual farmer is usually perfectly inelastic.
C) demand for basic foodstuffs is usually inelastic,meaning that factors that shift supply to the right decrease total revenues to sellers.
D) demand for basic foodstuffs is usually elastic,meaning that factors that shift supply to the right increase total revenues to sellers.

Accepted Answer

The demand for basic foodstuffs is usually inelastic, meaning that even when the supply increases, the total revenue for sellers may not increase proportionately. This is because consumers are not very responsive to price changes of basic food items and will continue to buy them even if the price increases slightly. Therefore, an increase in supply due to good farming conditions may lead to a decrease in total revenues for farmers.

Question 19

Table 5-6
 
-Refer to Table 5-6.Which scenario describes the market for oil in the short run in comparison to the long run?
A) Scenario A describes both the short run and the long run.
B) Scenario D describes both the short run and the long run.
C) Scenario D describes the short run,whereas scenario A describes the long run.
D) Scenario C describes the short run,whereas scenario B describes the long run.

Accepted Answer

In scenario D, both short and long run supply curves are perfectly elastic, indicating that producers can easily adjust their production in response to changes in price. In the short run, demand is not as elastic, which results in higher prices. However, in the long run, demand becomes more elastic as consumers find substitutes for oil and producers have more time to adjust their production. This is represented by scenario A, where the long run supply curve is more elastic than the short run supply curve. Therefore, scenario D represents the short run and scenario A represents the long run for the market for oil.

Question 20

Knowing that the demand for wheat is inelastic,if all farmers voluntarily did not plant wheat on 10 percent of their land,then
A) consumers of wheat would buy more wheat.
B) wheat farmers would suffer a reduction in their total revenue.
C) wheat farmers would experience an increase in their total revenue.
D) the demand for wheat would decrease.

Accepted Answer

The answer of Knowing that the demand for wheat is...

Quiz 5: Elasticity and Its Application

Because the demand for wheat tends to be inelastic,the development of a new,more productive hybrid wheat would tend to

The supply of oil is likely to be

Suppose that corn farmers want to increase their total revenue.Knowing that the demand for corn is inelastic,corn farmers should

Suppose researchers at the University of Wisconsin discover a new vitamin that increases the milk production of dairy cows.If the demand for milk is relatively inelastic,the discovery will

A decrease in supply will cause the smallest increase in price when

How did the farm population in the United States change between 1950 and today?

If soybean farmers know that the demand for soybeans is price inelastic,in order to increase their total revenues they should

Between 1950 and today there was a

An advance in farm technology that results in an increased market supply is

In the early 1970s,OPEC's goal was to

Table 5-6 -Refer to Table 5-6.Which scenario describes the market for oil in the long run?

Farm programs that pay farmers not to plant crops on all their land

Table 5-6 -Refer to Table 5-6.Which scenario describes the market for oil in the short run?

There are fewer farmers in the United States today than 200 years ago because of

The discovery of a new hybrid wheat would increase the supply of wheat.As a result,wheat farmers would realize an increase in total revenue if the

A decrease in supply will cause the largest increase in price when

In the market for oil in the short run,demand

Good news for farming can be bad news for farmers because the

Table 5-6 -Refer to Table 5-6.Which scenario describes the market for oil in the short run in comparison to the long run?

Knowing that the demand for wheat is inelastic,if all farmers voluntarily did not plant wheat on 10 percent of their land,then