Consider the Global Market for Barley,an Agricultural Commodity

question 127

Multiple Choice

Consider the global market for barley,an agricultural commodity.Suppose that in August,2014,the equilibrium price and quantity were P = $150 per tonne and Q = 350 million tonnes.In August,2015,the equilibrium price and quantity were P = $168 per tonne and Q = 350 million tonnes.Which of the following is the best possible explanation for this change in market equilibrium?

• A)There has been an increase in demand for barley.
• B)There has been a decrease in supply of barley.
• C)There has been a decrease in demand for barley.
• D)There has been a simultaneous decrease in demand and increase in supply of barley.
• E)There has been a simultaneous increase in demand and decrease in supply of barley.

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Definitions:

Amortization

The method of slowly depreciating the initial value of an intangible asset over its lifetime.

Exchange Rates

The price at which one currency can be exchanged for another currency.

Amortization Expense

The periodic reduction in the book value of an intangible asset over its useful life.

Functional Currency

The currency of the primary economic environment in which an entity operates, generally used in preparing financial statements.