Grahame Has a Crocodile Farm

question 143

Multiple Choice

Grahame has a crocodile farm.He collects eggs from the wild which are hatched on the farm.Suppose flooding is very severe this year and eggs become much harder to find.As a result, Grahame should expect to see the marginal productivity of his land:

• A)decrease
• B)increase
• C)remain unchanged
• D)turn negative

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Definitions:

Long-Run Aggregate Supply Curve

A graphical representation showing the relationship between the price level and the quantity of output that an economy can produce when all resources are fully employed, assuming no changes in technology or resource availability.

Classical Model

An economic theory that suggests markets function best with minimal government intervention and that supply and demand are the primary forces driving the economy.

Self-Regulating Market

A market mechanism in which market forces such as supply and demand are allowed to operate freely without external intervention, theoretically leading to efficient outcomes.

Say's Law

An economic theory that proposes supply creates its own demand, meaning production inherently creates the consumption of equivalent value.