Author Question: Why would irrigated farming not become more profitable if the federal government lowered the price ... (Read 84 times)

bobthebuilder · **on:** Jun 29, 2018

Why would irrigated farming not become more profitable if the federal government lowered the price farmers had to pay for irrigation water?

A) Farmers would have to pay more for electricity to pump the water.
B) The cost of owning or renting land that could be irrigated would rise.
C) The prices of irrigated crops would not rise.
D) Water is a marginal cost in farming.
E) Water is a sunk cost in farming.

Question 2

Refer to the scenario above. Which of the following is likely to be true if the game is played only once?

A) The equilibrium outcome will be a Nash.
B) The equilibrium outcome will be socially inefficient.
C) No unique equilibrium will occur.
D) Multiple Nash equilibria will occur.