The Following Two Graphs Depict the Equilibrium Price of a Pound

question 14

Multiple Choice

The following two graphs depict the equilibrium price of a pound of flax seed in Kentucky and West Virginia, respectively. Assume the type and quality of the flax seed being sold in the two states are identical. Further, assume flax seed sellers incur zero costs to transport flax seed between the two states and that there are no other barriers to trade. Use these graphs to answer the next two questions:


-Suppose the price of a pound of flax seed in West Virginia is currently $1.00.The law of one price suggests that because the price of a pound of flax seed is $1.20 in Kentucky,the price of a pound of flax seed will be ___________ in West Virginia after sellers adjust their supply in both markets.

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Definitions:

Single

In a research or statistical context, it typically refers to an unmarried individual or a data point not paired or grouped with others.

Hypothesis

A proposed explanation made on the basis of limited evidence as a starting point for further investigation.

Abstract

A summary or overview of the main points of a scholarly article or scientific study.

Operationally Define

The process of specifying the measurement criteria or procedures used to define research variables, ensuring clarity and reproducibility in scientific investigations.