In 2017,a Severe Drought Led to an Increase in the Price

question 48

Multiple Choice

In 2017,a severe drought led to an increase in the price of corn.Farmer Lyle was not affected by the drought.In 2016 there was no drought.In 2017,Farmer Lyle's

• A)consumer surplus increased.
• B)producer surplus increased.
• C)producer surplus increased and his consumer surplus increased.
• D)consumer surplus decreased and his producer surplus increased.
• E)supply of corn became perfectly elastic.

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Definitions:

Mutually Exclusive

Mutually exclusive projects or events are those that cannot occur simultaneously; choosing one option means the other cannot be selected.

NPV

Net Present Value, a method used in capital budgeting to assess the profitability of an investment or project.

Payback

Payback is the period of time required for the return on an investment to "pay back" the sum of the original investment, often used as a measure of investment risk.

Cash Flow

Cash flow signifies the net amount of cash and cash-equivalents being transferred into and out of a business, crucial for assessing its liquidity, flexibility, and overall financial performance.