Attempts Are Being Made to Develop a Biodegradable Plastic Using

question 51

Multiple Choice

Attempts are being made to develop a biodegradable plastic using agricultural produce such as potatoes.Identify a likely impact on the equilibrium price and quantity of potatoes if such attempts are successful,all other things remaining constant.

• A)The equilibrium price will increase and the equilibrium quantity will decrease.
• B)The equilibrium price will decrease and the equilibrium quantity will increase.
• C)Both equilibrium price and quantity will decrease.
• D)Both equilibrium price and quantity will increase.
• E)There will be no change in the equilibrium price and quantity.

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Definitions:

Personal Trusts

Legal arrangements where assets are managed by one party for the benefit of another, often used for estate planning and wealth management.

Risk Averse

An investor who will consider risky portfolios only if they provide compensation for risk via a risk premium.

Variable Annuity Contract

An insurance contract that provides future payments to the holder, where the amounts depend on the performance of the investment options chosen.

Hypothetical Constant-Benefit Payment

A theoretical payment scenario where beneficiaries receive a constant amount, regardless of changes in the underlying value or conditions.