Author Question: What would be the impact of a virus that infected the Midwestern corn crop? a. Price of corn ... (Read 72 times)

Redwolflake15 · **on:** Jun 30, 2018

What would be the impact of a virus that infected the Midwestern corn crop?
a. Price of corn increases and the price of wheat decreases
b. Price of corn decreases and the quantity of wheat increases
c. Quantities of corn and wheat increase
d. Quantity of corn decreases and the price of wheat increases

Question 2

The Stock Market Crash of 1929 probably contributed ____ to the Great Depression because _____.
a. little, it did no more than wipe out the speculative gains made earlier.
b. little, the Fed responded by increasing the money supply.
c. a good deal, corporations could no longer raise investment funds.
d. a good deal, consumer confidence and spending on durables were reduced.

yeungji · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

d. Quantity of corn decreases and the price of wheat increases.
Corn Market: The virus is represented by a shift back in the supply curve, which increases the price and decreases the quantity of corn - rule out answers b and c. Wheat Market: Because corn and wheat are substitutes, the increase in the price of corn would shift the demand for wheat out (people substitute from corn to wheat). An increase in demand for wheat would increase both the quantity and price of wheat.

Answer to Question 2

d. a good deal, consumer confidence and spending on durables were reduced.