In the Figure Above, Suppose the Price of a Pound

question 94

Multiple Choice

In the figure above, suppose the price of a pound of pecans is negatively related to the quantity of peanuts that farmers are willing to supply. If the price of pecans increases,

• A)the curve will shift leftward.
• B)the curve will shift rightward.
• C)the curve will be unaffected.
• D)there is a movement along the curve.
• E)None of the above answers is correct because the graph assumes that the price of pecans does not change.

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Definitions:

Benefits

Various forms of value or advantages that individuals or organizations receive, which can include health insurance, pensions, or profits.

Costs

The expenditure required to produce, acquire, or maintain a product or service, including materials, labor, and overhead expenses.

Absolute Advantage

The ability of an entity to produce a good or service more efficiently than its competitors, using fewer resources.

Comparative Advantage

The capacity for a person, company, or nation to generate a product or offer a service at a lesser opportunity cost compared to its rivals.