Suppose That Three Days After Taking Out the Futures Contracts

question 114

Essay

Suppose that three days after taking out the futures contracts the price of September canola increases from $610 to $640 a tonne.What additional payments will be made by or to the farmer and the oil processor? What will be their remaining obligations at the end of this third day?

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Definitions:

Tax Revenue

The income collected by governments through taxation from individuals and businesses.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning that no individual can be effectively excluded from their use, and one person's use does not reduce availability to others.

Regressive

A term often used to describe a tax system where the tax rate decreases as the taxable amount increases, leading to a higher burden on lower-income entities.

Sales Taxes

Taxes imposed on the sale of goods and services, typically calculated as a percentage of the sales price.