Author Question: Refer to Figure 3-5. At a price of 0 A) there is a shortage of 8 units. B) there is a shortage of ... (Read 64 times)

haleyc112 · **on:** Jun 29, 2018

Refer to Figure 3-5. At a price of 0

A) there is a shortage of 8 units. B) there is a shortage of 0 units.
C) there is a surplus of 8 units. D) there is a surplus of 0 units.

Question 2

Since 1950, there has been a substantial increase in wheat production. The increase in production has led to a decrease in the price of wheat because of which of the following factors?

A) The absolute value of the price elasticity of demand for wheat is less than 1 and the income elasticity of demand for wheat is greater than 1.
B) The absolute value of the price elasticity of demand for wheat is greater than 1 and wheat is a close substitute for other food products.
C) The income elasticity of demand for wheat is high and wheat is an inferior good.
D) The absolute value of the price elasticity of demand for wheat is less than 1 and the income elasticity of demand for wheat is low.