A Local Farmer Says That He Can Sell 50 Dozen

question 49

Multiple Choice

A local farmer says that he can sell 50 dozen ears of corn per day at his roadside stand."But if I raise my price," he claims,"the demand falls." The farmer is

• A) using the term demand correctly and is right in his conclusion.
• B) confusing demand and supply.
• C) incorrect because changes in prices affect quantity demanded, not demand.
• D) correct only if factors such as the prices of competitive items, the number of buyers, and the tastes of buyers remain constant.
• E) incorrect because he does not hold input prices and technology constant in his analysis.

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Definitions:

Monocular Cues

Powerful depth cues available from the image in one eye, either the right or the left.

Binocular Cues

Depth cues that depend on the combination of the images in the left and right eyes and on the way the two eyes work together.

Gestalt Principle

A theory that proposes humans naturally perceive objects as organized patterns and wholes, rather than as separate components.

Principle Of Closure

A Gestalt psychology principle suggesting that individuals perceive objects as whole, even when they are incomplete because our minds fill in missing details.