Suppose a Positive Technological Change in the Production of Disease-Resistant

question 218

Multiple Choice

Suppose a positive technological change in the production of disease-resistant corn caused the price of corn to fall.Holding everything else constant,how would this affect the market for wheat (a substitute for corn) ?

• A)The supply of wheat would increase and the equilibrium price of wheat would decrease.
• B)The demand for wheat would decrease and the equilibrium price of wheat would decrease.
• C)The demand for wheat would increase because consumers could afford to buy more wheat and corn.
• D)The demand for wheat would decrease and the equilibrium price of wheat would increase.

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Definitions:

Standard Price

A pre-determined cost that a company expects to pay for materials, labor, and overhead expenses.

Standard Price

A pre-determined cost assigned to a product or service, often used in budgeting and performance evaluations.

Direct Materials

Raw materials that are directly traceable to the production of specific goods or services.

Yards

A measurement unit equal to three feet or 0.9144 meters, often used in expressing lengths or distances.