An Insect That Is Resistant to Currently Used Pesticides Has

question 263

Multiple Choice

An insect that is resistant to currently used pesticides has infested the cotton crop, and this year's crop is only half of what was produced last year. You accurately predict that this

• A) will shift the supply curve of cotton to the right, the equilibrium price of cotton will increase, and the demand for cotton will fall.
• B) will shift the supply curve of cotton to the right, the equilibrium price of cotton will increase, and the quantity demanded of cotton will decrease.
• C) will shift the supply curve of cotton to the left, the equilibrium price of cotton will increase, and the quantity demanded of cotton will decrease.
• D) will shift the supply curve of cotton to the left, the equilibrium price of cotton will increase, and the demand for cotton will fall.

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Definitions:

Behavioral Biases

Psychological tendencies that affect investment decisions and financial behaviors.

Fundamental Risk

Risk that even if an asset is mispriced, there is still no arbitrage opportunity because the mispricing can widen before the price eventually converges to intrinsic value.

Implementation Costs

Refers to the expenses involved in putting a business plan or project into action, including technology, manpower, training, and other related costs.

Updating Beliefs

The process of adjusting one's expectations or predictions based on new evidence or information.