The Effect of a Drought on the Price of an Agricultural

question 143

Multiple Choice

The effect of a drought on the price of an agricultural product will be greater the more __________ the demand for the agricultural product.

• A)price inelastic
• B)price elastic
• C)income elastic
• D)a and c
• E)b and c

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Definitions:

Residual Value

Residual value is the estimated amount that an asset will be worth at the end of its useful life, reflecting its expected salvage value.

Double Diminishing-Balance

An accelerated method of depreciation that doubles the depreciation rate of the diminishing balance method, expensing a larger portion of the asset's cost near the beginning of its life.

Residual Value

The anticipated value of an asset at the conclusion of its lifespan.

Double Diminishing-Balance

An accelerated method of depreciation that calculates expense by doubling the straight-line depreciation rate applied to the declining book value of an asset.