The Price of Wheat Has Fallen Since 1950

question 243

Multiple Choice

The price of wheat has fallen since 1950.Which of the following explains this price decline?

• A)The price elasticity of demand is less than 1 (in absolute value)and the income elasticity of demand for wheat is low.
• B)The price elasticity of demand is greater than 1 (in absolute value)and the income elasticity of demand for wheat is low.
• C)The price elasticity of demand is less than 1 (in absolute value)and wheat is an inferior good.
• D)The price elasticity of demand is greater than 1 (in absolute value)and the income elasticity of demand for wheat is greater than 1.

---

Definitions:

Consumption

The act of using goods and services for personal needs or to generate utility.

Utility Function

A mathematical representation of how different combinations of goods or services can result in varying levels of satisfaction or utility to a consumer.

Consumer's Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing the benefit consumers receive from the purchase.

Earplugs

Small devices inserted into the ear canal to protect the ears from loud noises, water, or foreign bodies.