If the Demand Curve for Agricultural Products Is Elastic and Farmers

question 32

Multiple Choice

If the demand curve for agricultural products is elastic and farmers as a group become more productive,then prices of agricultural goods will __________ and total revenue earned by farmers will __________.

• A)decrease;increase
• B)decrease;decrease
• C)increase;increase
• D)increase;decrease
• E)We cannot answer this question without knowing how elastic the demand curve is.

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Definitions:

Public Good Preferences

The collective desire or inclination of a society towards goods or services that are non-excludable and non-rivalrous, benefiting all members of the society.

Government Failure

Occurs when government intervention in the economy causes more harm than good, leading to inefficient allocation of resources or failing to achieve desired policy outcomes.

Economically Inefficient Outcomes

Situations where resources are not allocated optimally, leading to wasted potential or benefits.

Incentive Structures

Systems or processes designed to motivate individuals to perform certain actions by offering rewards or punishments.