Suppose a Negative Technological Change in the Production of Disease-Resistant

question 181

Multiple Choice

Suppose a negative technological change in the production of disease-resistant wheat caused the price of wheat to rise.Holding everything else constant, how would this affect the market for corn (a substitute for wheat) ?

• A)The supply of corn would decrease and the equilibrium price of corn would increase.
• B)The demand for corn would increase and the equilibrium price of corn would increase.
• C)The demand for corn would decrease because consumers could afford to buy less wheat and corn.
• D)The demand for corn would increase and the equilibrium price of corn would decrease.

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Definitions:

Rent-Seeking Behavior

Activities aimed at increasing one's share of existing wealth without creating new wealth, often through manipulation or exploitation of the economic environment.

Agricultural Programs

Initiatives and policies designed to support, regulate, and improve the agricultural sector, including subsidies, research, and development.

Freedom To Farm Act

A United States federal law passed in 1996 that aimed at deregulating agriculture, allowing farmers to make planting decisions based on market demands rather than governmental directives.

Market Prices

The current price at which an asset or service can be bought or sold in a particular marketplace.