The Demand for Most Farm Products Is Relatively Inelastic

question 16

Multiple Choice

The demand for most farm products is relatively inelastic.All else constant, what is the effect on farm revenues as a result of the introduction of new and better farm equipment which increases productivity?

• A)Farm revenues increase.
• B)Farm revenues decrease.
• C)Farm revenues remain constant because consumers will not increase their consumption of farm products by much.
• D)Farm revenues could increase or decrease depending on the cost of this new equipment.

---

Definitions:

Production Possibilities Frontier

A graphical representation showing the maximum quantity of different goods that a society can produce with its available resources and technology, assuming efficient use of resources.

Opportunity Cost

The cost involved when the second most advantageous option is not selected during decision-making.

Feasible Outcomes

Possible results or conclusions that can realistically be achieved in a given scenario or model.

Computerized Assembly Line

A production line in which computers control the assembly of products, enhancing efficiency, precision, and consistency.