Suppose That the Corn Market Is Purely Competitive

question 179

Multiple Choice

Suppose that the corn market is purely competitive. If the corn farmers are currently earning negative economic profits, then we would expect that in the long run the market's

• A) supply curve will shift to the left.
• B) supply curve will shift to the right.
• C) demand curve will shift to the left.
• D) demand curve will shift to the right.

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Definitions:

Quintile

A statistical value that divides a set of data into five equal parts, each representing 20% of the distributed population.

Unemployment Benefits

Payments made by authorized bodies to unemployed people, intended to provide a temporary source of income while they seek new employment.

Social Security System

A government program that provides financial protection against economic risks (e.g., retirement, disability, unemployment) to its citizens.

Progressive Income Tax

A tax system in which the tax rate increases as the taxable amount increases, resulting in higher earners paying a larger percentage of their income in taxes than lower earners.