If the Producer of a Product Has Entered into a Fixed

question 50

Multiple Choice

If the producer of a product has entered into a fixed price sale agreement for that output, the producer faces:

• A)a nice steady profit because the output price is fixed.
• B)an uncertain profit if the input prices are volatile.This risk can be reduced by a short hedge.
• C)an uncertain profit if the input prices are volatile.This risk can be reduced by a long hedge.
• D)a modest profit if the input prices are stable.This risk can be reduced by a long hedge.
• E)a modest profit if the input prices are stable.This risk can be reduced by a short hedge.

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Definitions:

Black Middle Class

African American individuals and families that fall within the middle-income range, experiencing economic stability and upward mobility, particularly visible post-Great Migration.

Great Depression

A severe worldwide economic downturn that took place during the 1930s, leading to widespread unemployment and poverty.

New Deal

A series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States during the 1930s to provide relief, recovery, and reform from the Great Depression.

NYA

The National Youth Administration, a New Deal agency in the United States that provided work and education for young Americans during the Great Depression.