If the Prices Received by Farmers Increased and the Prices

question 56

Multiple Choice

If the prices received by farmers increased and the prices paid by farmers also increased, the parity ratio

• A) will necessarily be unchanged.
• B) may either increase or decrease.
• C) will necessarily increase.
• D) will necessarily decline.

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Definitions:

Subjective Probabilities

Probability estimates based on an individual's personal judgment or opinion rather than on objective data or specific calculations.

Marginal Utility

The additional satisfaction or utility that a consumer derives from consuming one more unit of a good or service.

Income Function

A mathematical representation that shows the relationship between an individual's or entity's income and one or more variables, such as the level of education or experience.

Diminishing Marginal Utility

Principle that as more of a good is consumed, the consumption of additional amounts will yield smaller additions to utility.