Article Summary According to the Department of Agriculture, Net Farm Income in Income

question 279

Multiple Choice

Article Summary
According to the Department of Agriculture, net farm income in 2017 will rise from $61.5 billion in 2016 to $63.4 billion in 2017, a modest 3.1 percent increase but also the first increase since 2013. Much of the increase came from the sales of grain inventory, along with increased revenue from milk and livestock. The net income for 2017 is still only about half of its peak level, and according to agricultural economist David Widmar, income closer to $72 billion would be a sign of an improving farm economy.
Source: Alan Bjerga and Jeff Wilson, "First U.S. Farm-Income Gain in Four Years Signals Hope of Bottom," bloomberg.com, August 30, 2017.
-Refer to the Article Summary.Assume that the increase in net farm income in 2017 was a result of average total cost falling from being equal to the market price to slightly below the market price at the output level where marginal cost equals marginal revenue.This indicates that the market went from

• A)breaking even to earning a profit.
• B)suffering a loss to breaking even.
• C)suffering a loss to earning a profit.
• D)earning a profit to suffering a loss.

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Definitions:

Dominant Strategy

Rephrased: In strategic decision-making, a Dominant Strategy is the optimal choice for a participant that yields the best outcome, independent of the strategies chosen by other players.

Nash Equilibrium

A principle in game theory where each participant's tactic is the best given the tactics of others, and none of the players stand to benefit from altering merely their strategy.

Credible Threat

A declaration or action by a party that it will follow through with a particular response if certain conditions are met, believed to be feasible by the other party.

Warranty

A guarantee, typically made by a manufacturer or seller, to repair or replace a product within a specified period if it is found to be faulty.