Consider the Following Demand and Supply Schedules for Some Agricultural

question 29

Multiple Choice

Consider the following demand and supply schedules for some agricultural commodity.
TABLE 5-2
-Refer to Table 5-2.Suppose we begin in a free-market equilibrium.If the government then imposes a production quota of 500 units,total farmers' income

• A)increases by $800.
• B)increases by $500.
• C)remains unchanged.
• D)decreases by $500.
• E)decreases by $700.

---

Definitions:

Taxability

The condition of being subject to taxation by governmental authorities.

Interest Rate

The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal.

Productive Economic Resource

Assets or inputs used in the production of goods and services, including land, labor, capital, and entrepreneurship.

Entrepreneurship

The activity of setting up a business or businesses, taking on financial risks in the hope of profit.