Wheat Is the Main Input in the Production of Flour

question 70

Multiple Choice

Wheat is the main input in the production of flour.If the price of wheat decreases,then we would expect the

• A)demand for flour to increase.
• B)demand for flour to decrease.
• C)supply of flour to increase.
• D)supply of flour to decrease.

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Definitions:

Transaction Costs

Expenses incurred when buying or selling goods and services, beyond the price of the goods themselves.

Sulfur Emissions

Gaseous emissions that include sulfur compounds, primarily sulfur dioxide, resulting from combustion processes and industrial activities.

Coase Theorem

A principle that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on their own, leading to an efficient outcome.

Property Rights

The legal rights to use, control, and derive benefits from a property or resource.