In the Long Run, a Year-Long Drought That Destroys Most

question 8

Multiple Choice

In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:

• A) higher prices.
• B) lower output.
• C) lower prices.
• D) None of these is true.

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Definitions:

Straight-Line Method

A technique for determining depreciation or amortization by equally distributing an asset's cost throughout its lifespan.

Salvage Value

An asset’s expected trade-in value at the point it concludes productive life.

Depreciation

Spreading out the cost of a tangible asset systematically over its life of service.

Property Plant

Long-term physical assets owned by a company, such as buildings and machinery, used in operations to generate revenue.