A Farmer Who Sells a Futures Contract Is Betting That

question 95

Multiple Choice

A farmer who sells a futures contract is betting that prices will _____ at the expiration of the contract.

• A)Decrease
• B)Increase
• C)Remain constant
• D)Guarantee high profits

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Definitions:

Economic Decision Makers

Individuals or entities responsible for choosing what to produce, how to produce, and for whom to produce in an economy, including households, businesses, and governments.

Welfare

Government-provided support for those unable to support themselves, including financial assistance, healthcare, and social services.

Rational Self-Interest

The principle that individuals tend to make decisions based on their own benefit, guided by the information available to them and their own preferences.

Economic Model

A simplified representation of economic processes, used to analyze and predict economic phenomena.