Hi k9queen-ga,
I have embedded the answers to these questions along with a brief
explanation for each:
#16 If there is a shortage of farm labors, we would expect
A) a decrease in the demand for substitutes for farm labor
b) the wages of farm laborers to decrease
c) the price of farm commodities to decrease
The answer is NONE OF THE ABOVE - a shortage of farm labors would
result in an increase in the demand for substitutes, increase in wages
of farm laborers, and price of farm commodities to increase (since its
now more difficult to produce).
#17 One result of a drought in the Midwest could be an increase in
a) farm machinery prices
b) the price of diesel fuel being used in farming
c) migrant farm workers wages
d) the price of frosted shredded wheat
This question's possible answers seem to be incomplete, so let me fill
in the blanks for what would be a potentially correct answer:
Farm machinary prices decrease (since a drought indicates a decrease
in the amount of usable crops, demand for farm machinary will also
decrease).
Diesel fuel used for farming as well as migrant farm workers wages
will also decrease in price (for the same reason as given above for
farm machinary).
The price of frosted shredded wheat will increase (since there is a
decrease in supply of wheat as a result of the drought).
#20 Suppose you make jewelry, If the price of gold falls, we would
expect you to
a) be willing and able to produce less jewelery than before at each
possible price
b) we willing and able to produce more jewelry than before at each
possible price
c) face a greater demand for your jewelery
d) face a weaker demand for your jewelry
The correct answer here is B - since the cost of gold is lower, the
cost of making the same gold jewelry is lower. This will cause an
upward "shift" in the supply curve (which incidentally means the same
thing as "be willing and able to produce less jewelery than before at
each possible price").
Hopefully you understand the logic used to answer these questions -
please post a clarification if you have any concerns :)
Cheers!
answerguru-ga |
