Use the Figure Below to Answer the Following Questions

question 68

Multiple Choice

Use the figure below to answer the following questions.

Figure 11.4.4
-Refer to Figure 11.4.4, which illustrates the long-run average total cost curve. Which one of the following statements is false?

• A)Economies of scale exist between 0 and Q₀ units of output.
• B)Diseconomies of scale exist between 0 and Q₁ units of output.
• C)Constant returns to scale exist between Q₁ and Q₂ units of output.
• D)Diseconomies of scale exist at quantities greater than Q₂ units of output.
• E)Constant returns to scale exist between Q₀ and Q₁ units of output.

---

Definitions:

Freedom To Farm Act

A U.S. federal law enacted in 1996 aimed at allowing farmers greater management flexibility in what they plant and produce.

Agricultural Price Supports

Government interventions to stabilize or increase agricultural product prices through mechanisms such as subsidies or purchase commitments.

Acreage Allotments

A pre-1996 government program that limited the total number of acres to be used in producing (reduced amounts of) various food and fiber products and allocated these acres among individual farmers. These farmers had to limit their plantings to the allotted number of acres to obtain price supports for their crops.

Parity Ratio

is a measurement used to compare the value of one thing against another, often in agriculture or finance.