Exam 3: A Policy Analysis Toolbox: Methods to Investigate Agricultural and Food Market Scenarios

Consider electricity and natural gas as alternative and substitute energy sources. In this scenario, we predict the cross-price elasticity of demand coefficieint for these two power sources to be negative (Ex<0)

When a market or a policy achieves a ""Pareto-Optimum"", then

Suppose a market experiences an "Increase in Supply", while the Demand Curve remains constant. Predict the correct changes in the equilibrium price and equilibrium quantity that are produced by the "increase in supply":

A Pareto-Better choice occurs when at least one person is made better-off, without making others worse-off.

The reaction to a price change along a product's demand curve is known to be elastic (Ep > 1) , Assume that that the $price increases for this product with an elastic demand. Under these conditions, total revenues ($P x Qd) received by a firm will decrease.

Which of the following statements best describe what the law of increasing opportunity costs means?

Which of the following is the best and most accurate definition of the Law of Demand?

Economists assume that rationality is a typical or normal human behavior in decision making. To achieve an optimal result, the rational decision maker is predicted to choose additional units of a scarce item until:

As defined in the model of supply and demand, the corn market temporarily experiences a shortage. Then the market begins adjusting itself, and moves towards the equilibrium price for corn. As the corn price increases, we predict that:

In economics, a resource is identified as a scarce resource, if the supply of the resource is unlimited in comparison to the relatively limited human demands for that resource.

Assume that suppliers of soybeans experience a change in natural production conditions. The natural growing conditions change from "normal" to "below normal". Which of the following is the best prediction of the impact of this change in production conditions in the soybean market?

Idenrtify the key measurement in economics that is most closely associated with this managerial question? "What is the extra $cost of producing one more unit of output?

A market is analyzed in economics as a situation where

Suppose the Czech Republic and Slovakia can produce either wheat or cotton on an acre of land. If the Czech Republic (CR) produces 1.0 bale of cotton, the CR gives-up 1.33 bushels of wheat. If Slovakia (SK) produces 1.0 bale of cotton, SK gives-up 2.00 bushels of wheat. Which nation has a comparative advantage in cotton output, and which nation has comparative in wheat output?

The claim that human beings are constantly faced with the necessity to "make choices," and the idea that every choice is accompanied by an opportunity cost, are emphasized in economics because