Author Question: What is the best inference about the impact of a decrease in transportation costs? a. The demand ... (Read 68 times)

colton · **on:** Jun 30, 2018

What is the best inference about the impact of a decrease in transportation costs?
a. The demand and supply curves will shift out, which will increase quantities of goods.
b. The supply curve will shift out, which will lead to lower prices to consumers.
c. Farmers will earn a smaller share of the selling price of their crops.
d. The demand curve will shift out, which will lead to higher prices and quantities of goods.

Question 2

Concerning the effect of New Deal farm measures, Walton and Rockoff conclude that the New Deal _____.
a. simply failed to help farmers because the farmer's terms of trade did not improve.
b. helped the farmer to a limited extent primarily through the stimulation of aggregate demand.
c. helped the farmer to a substantial extent by limiting farm output.
d. helped the farmer to a substantial extent by increasing farm output.

Joc · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

b. The supply curve will shift out, which will lead to lower prices to consumers.

Answer to Question 2

c. helped the farmer to a substantial extent by limiting farm output.